What is the main function of a petty cash fund in a business?

The main function of a petty cash fund in a business is to handle minor expenses efficiently. Petty cash serves as a small reserve of cash kept on hand to cover low-cost, everyday transactions that are impractical to pay by check or other means. This can include items such as office supplies, postage, or small repairs, which can be needed quickly and do not warrant the hassle of formal purchasing processes or paperwork.

Managing minor expenses efficiently through a petty cash fund allows businesses to streamline their operations, ensure that small but necessary expenditures can be made promptly, and maintain a level of cash flexibility. This approach helps reduce administrative burden while keeping workflow uninterrupted, as there is no need for extensive approval processes for small amounts of cash.