What is 'Imprest'

An imprest is a cash account that a business uses to pay for small, routine expenses. A fixed balance is maintained in the account, and it is replenished routinely to maintain that balance. Alternatively, an imprest can refer to a monetary advance given to a person for a specific purpose.


The most well-known type of imprest is a petty cash account. Petty cash is used for transactions for which it doesn't make sense to go through the hassle of writing a check. It is typically a set amount of cash held on-site that a business can use to reimburse employees and pay for small expenses. Petty cash funds are typically handled by a custodian, who monitors the account and hands out cash to employees in exchange for business-related receipts.

Imprests are also used for purposes such as employee payroll, dividends, employee travel and bonuses. Once the expenses are paid, the fund is reimbursed by the company's primary bank account.

The benefit of imprests is that it's harder to use their funds for unauthorized expenses, since they are set aside for specific purposes. They usually pay out the same amount of money on a regular basis, which ideally brings the account close to a zero balance, then they are automatically replenished with that set amount. If there are discrepancies, it's not hard to pinpoint what went wrong. It is an easy way to both closely monitor expenses and protect against fraud.

The Imprest System

The imprest system was developed to track and document cash expenses and how they are used, following a general process:

  • A petty cash fund is established, with a set amount of cash. This is recorded in the company's ledger.
  • Any expenses paid through the petty cash fund must be documented with receipts.
  • The fund is replenished regularly with disbursement receipts to maintain a fixed balance.
  • The fund is monitored closely for any discrepancies between expected cash (based on documentation) and actual cash. If any discrepancies exist, they are investigated.

The Future of Imprests

As companies transition to heavier reliance on electronic transactions, the imprest system is falling out of favor. It can be much easier to just use a company credit card than to use an imprest, since the success of the imprest system depends on the accuracy of its documentation. Also, it is important to know and monitor the exact amounts paid through the imprest on a regular basis so that replenishment amounts are sufficient.

  1. Petty Cash

    A small fund of cash kept on hand for purchases or reimbursements ...
  2. Cash Accounting

    Cash accounting is an accounting method in which revenues and ...
  3. Cash Trading

    Cash trading is a method of buying or selling securities by providing ...
  4. Cash

    Cash is legal tender or coins that can be used to exchange goods, ...
  5. Free Credit Balance

    Free credit balance is the cash held in a customer's brokerage ...
  6. Account Balance

    1. The amount of money in a financial repository, such as a checking ...
Related Articles
  1. Investing

    Cash: Can A Company Have Too Much?

    Cash is something companies love to have. But if they are not using it there could be problems.
  2. Investing

    Analyze cash flow the easy way

    Learn the key components of the cash flow statement, how to analyze and interpret changes in cash, and what improved free cash flow means to shareholders.
  3. Investing

    Cash Flow on Steroids: Why Companies Cheat

    Pressure to be the best can sometimes push corporations to cheat. Learn how they do it and how to spot it.
  4. Financial Advisor

    Why Cash is King When Markets are Volatile

    After the past several years, you might be addicted to equity. But when markets turn volatile, cash is the best option. Here's why.
  5. Investing

    Operating Cash Flow: Better Than Net Income?

    Differences between accrual accounting and cash flows show why net income is easier to manipulate.
  6. Investing

    Cash Flow From Investing

    Cash flow analysis is a critical process for both companies and investors. Find out what you need to know about it.
  7. Investing

    Cheap Stocks or Value Traps?

    The value of stocks that trade at less than cash per share can be deceiving.
  1. Where Do Companies Keep Their Cash?

    Cash and cash equivalents are the first items on a company's balance sheet, but they are not same. Read Answer >>
  2. What is the difference between accrual accounting and cash accounting?

    Understand the differences between the two basic methods of accounting commonly used by businesses: cash accounting and accrual ... Read Answer >>
  3. How can you use a cash flow statement to make a budget?

    Understand how a cash flow statement can be used to create a company budget. Learn the difference between a cash budget and ... Read Answer >>
  4. When looking at my online broker account, I see an account value, cash value and ...

    When looking at some online brokerage accounts, there are a few figures that may be confusing, including account value, cash ... Read Answer >>
Hot Definitions
  1. Discount Rate

    Discount rate is the interest rate charged to commercial banks and other depository institutions for loans received from ...
  2. Economies of Scale

    Economies of scale refer to reduced costs per unit that arise from increased total output of a product. For example, a larger ...
  3. Quick Ratio

    The quick ratio measures a company’s ability to meet its short-term obligations with its most liquid assets.
  4. Leverage

    Leverage results from using borrowed capital as a source of funding when investing to expand the firm's asset base and generate ...
  5. Financial Risk

    Financial risk is the possibility that shareholders will lose money when investing in a company if its cash flow fails to ...
  6. Enterprise Value (EV)

    Enterprise Value (EV) is a measure of a company's total value, often used as a more comprehensive alternative to equity market ...
Trading Center