Running out of petty cash isn’t just inconvenient it can disrupt your operations. But more than that, failing to replenish it correctly can cause accounting inconsistencies and make you vulnerable during audits. 

Here’s how to set up a replenishment process that works, keeps your books clean, and ensures BIR compliance. 

1. When Should You Replenish?

There’s no fixed rule, but best practice is: 

• When 75–80% of the fund is used 

• Or monthly, aligned with your accounting close 

• Immediately after a liquidation approval 

Set thresholds in your ERP system so it sends a replenishment reminder when needed. 

2. What Should Be Replenished?

Only validated and approved expenses should be replenished: 

• Matched with ORs 

• With complete liquidation forms 

• Categorized properly (e.g., Supplies, Meals, Fuel) 

You don’t replenish the full fund—only the amount spent. 

3. Replenishment Workflow in Dynamics 365

With ERP automation, here’s how it works: 

1. Petty cash custodian submits liquidation with attachments 

1. Reviewer validates and approves expenses 

1. ERP creates a journal entry to replenish the amount used 

1. Cash or check is released to the fund 

Everything is traceable, time-stamped, and audit-ready. 

4. Avoiding Audit Flags

Auditors often spot these issues: 

• Replenishing without liquidation 

• Missing receipts 

• Replenishment amounts that don’t match expenses 

• No formal policy or workflow 

Avoid these by integrating controls in your ERP and training custodians. 

✅ Replenishing petty cash isn’t just a refill it’s a financial process that supports operations and protects your books. With a structured workflow and ERP tools like Dynamics 365, your team can keep moving while staying compliant.