Why Use The Imprest System
In this example the maximum amount of petty cash that can be issued (spent) is $100. You can only spend what you have and you are only replenished with what you spend, in this case $90
In a non imprest system where a fixed amount is issued every month e.g. $100 every time cash is required, there is no incentive to ensure all money issued has been documented because when money is all spent a check for a fixed amount is issued. It is much more difficult to reconcile a non imprest system as you never know how much exactly should be in the float.
In an imprest system the amount requested is documented, the documentation being the petty cash dockets and their associated receipts or invoices. So at all times you can check how much should be left in the petty cash float by deducting the amount spent from the opening petty cash float.
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