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Most major corporations maintain a ledger, whether manual or via a computer program, where the finance department records incoming and outgoing adjustments to the company's cash. Most companies also have a petty cash account for smaller, immediate needs for cash such as postage or a Pizza lunch. Recording petty cash entries within main ledgers is not very efficient, which is why a petty cash book is also maintained. In a Fixed Advance system, a fixed amount is assigned to a person who will manage the petty cash account. This amount will appear in the main ledger as an indication of the assigned cash, but also in the separate petty cash book as a beginning balance. Then, each transaction from petty cash will be recorded in the petty cash book, normally in a column specific to the intended purpose; in the two earlier examples, the postage stamps would appear in a postage account and the pizza lunch may be in an employee welfare account. Then at the end of a specified period (usually a month), the totals of each column are moved to the main ledger to reflect the expense, and also the cash used is replenished so the new fiscal period brings a full account. This allows for cash to be available to petty cash, and clear organization of the account. In an open system, the fixed amount assigned is used until spent, at which time, the amount is replenished and the expenses recorded. This would be more efficient in a scenario where the petty cash account is rarely used, or used so often that the account must be regularly replenished. However, in this latter example, the company may find that a higher amount is needed in petty cash. In an imprest system, the petty cash administrator estimates what the petty cash expenses will be for the month, and this is the amount assigned to the account. This is the most often used type, as it requires less replenishments and doesn't end the period with too much cash in the petty cash, where it is unable to gain interest as it would in other uses. The petty cash book is a method to increase organization and efficiency in accounting records for an organization. The method choice depends on the individual needs of the business.

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