What is the imprest system of handling cash?

The imprest system is a cash management method where a fixed amount of cash is set aside for specific expenses, such as petty cash. This fund is replenished regularly, typically when it is nearly depleted, by submitting receipts for expenditures. The system ensures better control over small cash disbursements and simplifies accounting, as transactions are documented and tracked against the initial fixed amount. It helps maintain accountability and reduces the risk of cash mismanagement.