Imprest System - What is the Imprest System?
Definition: The Imprest system is a kind of financial accounting system, and is most commonly used for petty cash. It consists of a cash balance which is replenished at the end of the period or when circumstances require it.
The Imprest System is a kind of financial accounting system and the petty cash system is the most usual form of this.
An imprest system's main characteristic is that a fixed amount is reserved, and then this amount is replenished at the end of a period or whenever necessary. The replenishment funds aren't credited on the imprest account - but from another source entirely. It can be seen as a permanent debt.
Working with an Imprest System
At the end of either a week or a month, depending on how many transactions are entered and how much your original float is, the total of your expenses are entered into your petty cash ledger (the imprest system) and added together.
This amount is deducted from your float and then reimbursed via the bank account to bring your petty cash float back up to the fixed amount held within your petty cash.