Managing petty cash in a condominium

Why petty cash exists and when to set it up

Petty cash exists for a practical reason: not every condominium expense can wait for a bank transfer from the condominium account. A locksmith called for a jammed gate, a few cleaning products for the stairwell, a small spare part for the automatic gate: these are modest but frequent expenses, and requiring a bank transfer for every ten euro receipt would be inefficient.

Setting up a petty cash fund is not a legal requirement but a management practice that the assembly can approve, fixing a maximum amount, often between 200 and 500 euros depending on the size of the building, to be topped up periodically. The resolution should state the amount of the fund, who can authorize expenses from it, and how often the cash is reported to the owners.

Limits on the use of cash

A condominium, like any entity making payments, must respect the legal limits on cash transactions set by anti money laundering rules, which have been revised over time. It is therefore important to check the threshold in force at the time of payment before authorizing a significant cash expense.

In practice this means petty cash should stay genuinely small and reserved for minor expenses, while any larger supply or service should always be paid by bank transfer from the condominium account, never by artificially splitting a payment to stay under a threshold: this kind of splitting is not permitted and exposes the property manager to liability.

The movement log and supporting documents

Every euro that enters or leaves the cash fund needs a written trace. Even a simple cash log should record, for each movement: the date, a description of the expense, the amount, the remaining balance, and a reference to the supporting document.

Supporting documents are the proof linking a cash movement to a real expense: a receipt, an invoice, a small bill. Without the document, that line item in the annual statement has no backing and can legitimately be challenged by an owner during the assembly, or in more serious cases lead to a request for clarification on the management of the funds.

• Date and reason for every movement
• Amount and running balance of the cash fund
• Number and type of the attached supporting document
• Signature or acknowledgment from whoever authorized the expense
• Periodic cash count checked against the log

Topping up the fund and linking it to the bank account

When the cash fund drops below a minimum threshold, the property manager withdraws from the condominium bank account the amount needed to bring it back to the level set by the assembly. This withdrawal should be recorded in the accounts as a transfer from the bank account to the cash fund, not as a generic expense: it is simply a movement of liquidity that must match the bank statement.

Keeping the bank account and the petty cash fund separate, but linked through this tracked top up mechanism, makes it possible to reconstruct at any point in the year exactly how much cash is physically on hand and how much has been spent since the last top up.

Reporting to the assembly and auditor checks

In the annual statement, petty cash should appear as its own line item, showing the opening balance, top ups made during the year, the total of documented expenses, and a closing balance that can be verified with a physical cash count. If the condominium has appointed an auditor or an accounting review committee, the petty cash fund is typically the first item checked, precisely because it is the part most exposed to material errors or oversights.

Software such as AmministraPro allows every petty cash movement to be recorded alongside the rest of the condominium accounts, lets a scanned copy of each supporting document be attached to the corresponding entry, and automatically produces the summary to present to the assembly, reducing the risk that a single misplaced receipt turns into a point of dispute.

Frequently asked questions