
Short answer: Run petty cash for a Singapore company on an imprest system: fix a float, pay small expenses against signed, numbered vouchers with receipts attached, and top the float back up by exactly what was spent. Keep the vouchers and receipts for at least 5 years. Claim GST only where a valid tax invoice or simplified tax invoice supports the purchase.
Petty cash in Singapore is still common in small offices, retail outlets, workshops and F&B businesses that need to pay for parking, courier fees, cleaning supplies or a last-minute stationery run. The amounts are small, but the record-keeping rules are the same as for any other expense. This guide explains how to set up an imprest float, what a petty cash voucher should show, the journal entries, and the controls that protect the float.
Key facts at a glance
- Companies Act 1967 s 199(1) requires records that sufficiently explain the company’s transactions; s 199(2) requires them to be kept for at least 5 years from the end of the financial year in which the transactions are completed.
- Income Tax Act 1947 s 67(1)(a) requires records to be kept for 5 years from the Year of Assessment (YA); s 67(5)(b) expressly includes invoices, vouchers and receipts.
- GST-registered companies must keep GST records for at least 5 years after the end of the GST accounting period (GST Act 1993 s 46(2)(b)).
- A simplified tax invoice can support an input tax claim where the total payable, including GST, does not exceed S$1,000.
- Failing to keep records can lead IRAS to estimate income, disallow expenses and input tax, and impose penalties of up to S$5,000.
- Default under Companies Act s 199 is an offence carrying a fine of up to S$10,000 or imprisonment of up to 12 months, plus a default penalty.
Raffles Corporate Services works with a panel of experienced Singapore law firms who offer cost-effective and efficient legal service and advice. This article is general information only and is not legal advice.
What is an imprest petty cash system?
An imprest system keeps petty cash at a fixed amount, called the float, and replenishes it periodically by the exact total of the vouchers paid out. At any moment, cash in the box plus vouchers paid since the last top-up should equal the float.
The advantage is that the float itself never moves in the books unless the company decides to change its size. Expenses are recorded only when the box is topped up, using the vouchers as the source documents. Any shortage shows up straight away, because the arithmetic either agrees with the float or it does not.
How do you set up petty cash in Singapore step by step?
Set up petty cash by approving the float in writing, appointing one custodian, drawing the float from the company bank account, and agreeing the voucher, approval and top-up rules before the first dollar is spent.
- Decide the float. Look at three months of small cash purchases and size the float to cover roughly two to four weeks of normal spend.
- Approve it. Record the float amount, custodian, spending limit per voucher and permitted expense types in a short directors’ resolution or a written finance policy.
- Draw the float by a traceable bank withdrawal or cheque payable to the custodian, never from a director’s personal funds.
- Set up the ledger. Create a “Petty cash” asset account in your chart of accounts, separate from the bank account.
- Issue pre-numbered vouchers, physical or in your expense app, and a lockable cash box kept in a restricted location.
- Set the replenishment trigger, for example when cash falls below 25% of the float, or at each month-end, whichever comes first.
- Schedule a monthly count by someone other than the custodian.
If you are building the ledger from scratch, our Singapore SME chart of accounts template shows where petty cash and staff advance accounts sit.
What should a petty cash voucher show?
A petty cash voucher should show who was paid, how much, what for, who approved it and who received the cash, with the supplier’s receipt or invoice attached. The voucher is the internal record; the receipt is the external evidence.
| Field on the voucher | Why it matters |
|---|---|
| Voucher number (pre-printed or system-generated) | Gaps or duplicates show up at reconciliation |
| Date of payment | Places the expense in the right month and GST period |
| Payee and description of the purchase | Shows the expense is for the business |
| Amount, with GST shown separately where the receipt shows it | Supports the expense and any input tax claim |
| Expense account or category | Saves the bookkeeper guessing later |
| Signature of the person receiving the cash | Proves who took the money |
| Approver’s signature (not the recipient) | Basic segregation of duties |
| Attached receipt or tax invoice | The external evidence IRAS looks for |
Where no receipt exists, the voucher should explain why and be approved by someone senior. Treat these as rare exceptions.
What records does IRAS expect for petty cash?
IRAS expects the same as for any expense: source documents that let it verify each entry in the books, kept for at least 5 years from the relevant YA. Section 67(5)(b) of the Income Tax Act 1947 defines records to include invoices, vouchers and receipts, so petty cash vouchers are tax records in their own right.
The Companies Act sets a parallel duty. Section 199(1) requires a company to keep accounting and other records that sufficiently explain its transactions and financial position, and section 199(2) requires them to be kept for not less than 5 years from the end of the financial year in which the transactions were completed. The text of section 199 is on Singapore Statutes Online.
According to IRAS’s record keeping requirements page, if records are inadequate IRAS may estimate revenue, disallow expense claims, capital allowances or GST input tax claims, and impose penalties of up to S$5,000. IRAS also states that records may be kept electronically, including by imaging, without seeking its approval, provided the requirements in its record keeping guides are met. Scanning each receipt into your accounting system on the day is therefore acceptable.
For the wider GST picture, see our guide to GST record-keeping and staying ready for an IRAS audit.
Can you claim GST on petty cash purchases?
Yes, if the company is GST-registered and each purchase is supported by a valid tax invoice addressed to the company, or by a simplified tax invoice. A plain till slip without the supplier’s GST registration number does not support a claim.
IRAS allows a GST-registered supplier to issue a simplified tax invoice where the total payable, including GST, does not exceed S$1,000. Most petty cash purchases fall under that limit. Per IRAS’s invoicing guidance, a simplified tax invoice must show:
- the supplier’s name, address and GST registration number;
- the date of issue;
- an identifying number, such as an invoice number;
- a description of the goods or services;
- the total amount payable including GST; and
- a statement similar to “price payable includes GST”.
Input tax should be claimed in the GST period that matches the invoice date, so do not hold vouchers for months, and the purchase must be for the business. IRAS reports that incorrect input tax claims are the most common mistake found in its GST audits, and petty cash is a frequent source of them.
What are the journal entries for petty cash?
Under the imprest method there are only three regular entries: setting up the float, replenishing it, and changing its size. Expenses hit the books at replenishment.
Worked example: the float is S$500. During the month the custodian pays four vouchers: courier S$32.70 (including GST of S$2.70), stationery S$54.50 (including GST of S$4.50), cleaning supplies S$21.80 (including GST of S$1.80) and a taxi fare of S$18.00 where the receipt does not show a GST registration number. Total vouchers are S$127.00 and the count shows S$373.00 in cash, which agrees with the float.
| Event | Debit | Credit | Amount (S$) |
|---|---|---|---|
| 1. Set up the float | Petty cash | Bank | 500.00 |
| 2. Replenish at month-end | Postage and courier | 30.00 | |
| Printing and stationery | 50.00 | ||
| Cleaning and upkeep | 20.00 | ||
| Transport | 18.00 | ||
| GST input tax | 9.00 | ||
| Bank | 127.00 | ||
| 3. Increase float to S$800 | Petty cash | Bank | 300.00 |
| 4. Unexplained shortage found at count | Petty cash shortage (suspense) pending review | Petty cash | Amount short |
After replenishment the petty cash account still shows S$500, and only S$9.00 of input tax is claimed because the taxi receipt does not qualify. Entry 4 is temporary until the shortage is investigated. Our separate article on reconciling a petty cash float that is short at month-end walks through that process.
How do you reconcile petty cash each month?
Count the cash, add up the vouchers paid since the last top-up, and check that the two together equal the approved float. Someone other than the custodian should do or witness the count.
- Count notes and coins at a fixed cut-off, with the custodian present.
- Total the unreplenished vouchers and check they are numbered in sequence.
- List any IOUs or cash advances to staff separately, with names and dates.
- Confirm cash plus vouchers plus advances equals the float.
- Sign and date a count sheet, then replenish and post the entries.
See our monthly bookkeeping checklist for where this fits.
What controls stop petty cash going missing?
The core control is segregation of duties: the person who holds the cash should not approve their own payouts, replenish their own float or count their own box. In a very small team, a director can review and sign off instead.
- One named custodian, with a named backup during leave.
- A maximum amount per voucher, with larger items paid by bank transfer or company card.
- No splitting of purchases to stay under the limit.
- Replenishment cheques or transfers approved by someone other than the custodian.
Our article on segregation of duties on a small-business budget covers how to split these roles when you only have two or three people.
What are the most common petty cash mistakes?
Most problems come from missing evidence or from letting the float become a personal wallet:
- Receipts in a staff member’s name with no voucher linking them to the business.
- GST claimed on receipts that are not tax invoices or simplified tax invoices.
- A “balancing” expense posted at year-end to make the petty cash account agree with the box.
- Vouchers held for a quarter, so expenses and input tax land in the wrong period.
- No count sheets, so nobody can show the float was ever reconciled.
Should you replace petty cash with PayNow or company cards?
For many companies, yes, at least partly. PayNow, bank transfer or a company card leaves a bank record for every payment and removes most of the counting and theft risk.
Electronic payment does not remove the need for evidence. A bank line shows that money left the account, not what was bought or whether GST was charged, so you still need the receipt or tax invoice. A sensible middle path is a small cash float for cash-only items and cards or PayNow for everything else. If you are deciding whether the company needs to register for GST before worrying about input tax, the GST registration checker on our free compliance tools page gives a quick answer.
Frequently asked questions
How much petty cash should a small company keep?
There is no legal minimum or maximum. Size it to a few weeks of normal small cash spend and pay anything larger by bank transfer or card.
How long must we keep petty cash vouchers and receipts?
At least 5 years. The Income Tax Act counts from the relevant YA, the Companies Act from the end of the financial year in which the transaction was completed, and the GST Act from the end of the GST accounting period. Keep them for the longest period that applies.
Can we keep scanned receipts instead of paper?
Yes. IRAS accepts records kept in electronic form, including imaging, without prior approval, provided the requirements in its record keeping guides are met.
Is a receipt enough to claim GST on a small purchase?
Only if it qualifies as a simplified tax invoice, which is possible where the total including GST does not exceed S$1,000 and the receipt shows the supplier’s GST registration number, an identifying number, a description and a statement that the price includes GST.
Does a dormant or one-person company need a petty cash system?
If no cash is spent, no. If a director pays small expenses personally, record them as a director’s expense claim with receipts rather than running an informal float. The company secretary should keep any related resolutions with the statutory records; Singapore Secretary Services explains what those records involve.
Need help with this?
Raffles Corporate Services can handle the ACRA filings, compliance documentation and records for you, and where court proceedings or legal advice are needed, we work with a panel of experienced Singapore law firms who offer cost-effective and efficient legal service and advice.
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Last reviewed: 20 October 2026. The Editorial Team, Raffles Corporate Services.
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