Getting money from the till to the bank teller is an essential function of many small businesses.
Designing and implementing policies around cash handling reduces risk within your business. See below some of the basics on effective cash handling to ensure that you are banking the cash you have earned.
1. Standardise a process
One of the first things you will need to do is to review your current procedures. Look at functions such as receiving the cash and proving change to customers, preparing floats, shifting cash regularly from the till to a secure area and how the money is counted at the end of the day. Ensure that key steps or triggers for each of these processes are documented and understood by your staff.
A well implemented system will eliminate duplication and improve efficiency, in addition to ensuring that your cash is secure and minimal errors made.
2. Minimise handling of cash, where possible
Being part of a team means that everyone has a role to play. Keeping set cashier staff where possible will create efficiencies within the team, as the non-cashier staff can keep to their primary function. This also creates accountability within the business, as issues with cash handling can be limited to a smaller number of people, instead of everyone in an entire shift.
That said, it is important that those who count the money received are different to those that account for the money. This way there is some form of separation of duties.
3. Petty Cash
Having a record of any money that comes out of the till for sundry items will assist you in reconciling at the end of the day. Receipts should take the place of any cash taken. Ideally, there would be a separate petty cash float to cover any expenses, and this function is kept entirely separate from the receipt of cash income.
4. Count the Cash
Ensure that you reconcile your till at the end of a shift or at the end of the day. This is essential in ensuring that you are accounting for and banking the cash received. While there may only be small differences, ensuring you have a record of discrepancies over time will enable you to identify trends before they become bigger issues.
5. Set Upper limits
When you expect to have busy periods, it is important that you set an upper limit on what the business is prepared to carry both in the tills and on the premises. Having a plan to remove excess cash will ensure you are minimising risk for both theft from internal and external threats.
6. Technology
As we emerge from the post-covid environment, many customers are limiting the cash they are now carrying, opting instead for “tap and go” and payments through mobile phones and watches. Ensuring you are able to receive these payments reduces cash handling risks significantly and has the income in your bank account without you having to leave the premises.
7. Accounting
Accounting programs such as Xero are designed to account for a variety of business in a variety of industries. Having a point of sales program that integrates with your accounting system to assist you in taking sales and reconciling cash drawers can create time efficiencies, saving you both time and money. Regular reconciling and reporting are key to identifying any errors or mishandling of your income.
Having a policy for cash in your business, no matter how well written, is only as good as the level of compliance with the procedures. Ensure your staff have received proper training, and there is a level of oversight to ensure these processes are followed.
To discuss ways that Cutcher and Neale can assist with your cash handling processes, reconciliation or accounting, please reach out to an advisor who can assist with your specific circumstances.
