Petty cash controls for UAE small businesses that actually prevent losses

Keep the cash in a locked box or small safe, with the key held only by the custodian. Store the box away from the reception desk, where visitors and delivery drivers come and go.

An imprest system gives the custodian a fixed float, say AED 3,000. As money is spent, receipts replace cash in the box, so cash plus receipts always equals AED 3,000. When cash runs low, the custodian submits the receipts and is topped up by exactly the amount spent.

The beauty of the system is that any count shows instantly whether something is wrong. If cash plus receipts equals AED 2,860, AED 140 is unexplained.

Petty cash rules should fit on a single page next to the cash box.

• One named custodian, with a deputy for leave periods
• Maximum single payment, e.g. AED 300; anything larger goes through normal payables
• Every payment has a receipt or a signed voucher explaining why no receipt exists
• Receipts show supplier name, date, amount and VAT; ask for a tax invoice where VAT is charged
• No IOUs, salary advances or personal loans from petty cash
• Weekly count by the custodian, monthly surprise count by someone else

A Dubai clinic runs a AED 3,000 float. During October the custodian pays: water and cups AED 420 (with AED 20 VAT on a tax invoice), courier fees AED 385 (receipts with AED 18.33 VAT), plumber call-out AED 250 (no VAT, unregistered), taxi for lab samples AED 145, stationery AED 315 (AED 15 VAT). Total spent: AED 1,515. Cash in box: AED 1,485.

Top-up journal: debit office supplies AED 700, debit courier AED 366.67, debit repairs AED 250, debit travel AED 145, debit VAT input AED 53.33; credit bank AED 1,515. The float returns to AED 3,000 and every dirham has a home.

Watch for top-ups that grow month after month without a business reason, round-number receipts from the same supplier, handwritten receipts without a stamp or TRN, and counts that are always perfect but only ever done by the custodian. Our view: in a business with more than ten staff, petty cash spending above AED 5,000 in a month usually means purchases that should go through normal suppliers and invoices are being routed through cash for convenience.

A missing receipt is also a VAT problem. Without a valid tax invoice, the input tax cannot be recovered, and over a year small amounts add up. A clinic spending AED 2,000 of VAT-able petty cash each month without receipts loses about AED 1,140 of input tax a year, more than the cost of training the custodian properly.

Set up petty cash as its own cash account. The custodian photographs each receipt in the mobile app as it is paid; the AI agent reads it, in Arabic or English, picks out the VAT, proposes the expense account and posts it against petty cash. The petty cash balance in the ledger then matches the box at any time.

At top-up, the agent drafts the transfer from the bank for the exact amount spent. Ask “what has petty cash been spent on in the last three months by category?” to spot drift. Custom categories or approval thresholds for petty cash can be set up on request.