Balancing a drawer isn’t a big worry for some small-business owners; as long as there is money in the drawer, they’re good. To others, there is the constant worry if that is the correct amount of cash in the drawer. Many don’t worry about balancing the drawer until year end or until there is an audit.
The fact of the matter is that inappropriate handling of cash is one of the leading causes of theft or loss. Five bucks here or there may not seem like a lot of money, but by the end of the year you could end up with a drawer that is hundreds of dollars short. Ask yourself: “Do I do payouts?” “Does my employee always bring back the proper change?” “Does yesterday’s ending drawer match today’s starting drawer?” If your answer to any of these questions is “I don’t know,” you likely don’t have the proper protocols in place to protect you and your employees.
If you have a modern point-of-sale system, it is likely that a lot of these problems can be easily solved if you start using the system properly, but for the sake of this explanation, we are just going to assume that this is a regular old cash register. Lets get a couple of notes out of the way first:
Office safe: If you have a large cash business, an office safe is an absolute must. It’s important that you have a cash limit on the drawer. Once you hit XXX amount of cash, you must transfer the excess into the safe. Depending on the store and volume, that could be anywhere from $500-$2000. There are many reasons for this, but the most obvious is theft; it is just low hanging fruit. A decent fire proof safe will run you between $200-500 and would be a lovely tax deduction!
Payouts: Don’t do it, but if you must, there is typically a payout feature on the register or POS. If you are going to insist on using it (and if you have a lot of these, I am going to insist you not) make sure you use the button. If you don’t, then it will look like an over/short at the end of the day. If you have a lot of payouts, consider using a service such as Expensify that will handle all employee reimbursements.
Beginning & ending balances; Your drawer should have a beginning and ending balance that should always be achieved. You should try and make sure there is a nice blend of cash to make change with at the beginning and end of the day. Typically, you will want to have about $200-500 in the drawer. If you’re a seasonal business, you can increase the balance in the busy season, then bring it back down to the lowest amount you need.
Start of day: When a cashier starts their day, they should verify last night’s ending draw. As stated previously, this should be the same amount every day, $200. Once they have validated the amount, they should make sure to open a till on their POS if there is a Point-of-Sale.
End of Day: This is the important part of the day. Look at the register Z-Tape or End of Day report. This report goes by many names, but contains information similar to the following:
Look at the tender type, and pull out the exact amount of cash, in this example $276.00 (if there is change, take it out too, slacker). Pull it out, and count the remaining cash. In this example it should be $200. If it isn’t, go back and count the cash again. If there is still a difference, you have an over/short. If you have over $200 you’re over, and you short-changed someone; if it’s less, you are short. It’s not the end of the world unless this continues to happen.
What to do if I have an over/short: You want to have your drawer remain at $200 for the next person, so you are going to take/add from your deposit in order to make sure your drawer is at its ending balance. Make a note for the deposit, that there was an over/short, so whoever is doing your bookkeeping isn’t looking for it.
Once your discrepancies are resolved, make out a deposit slip for the exact amount, and put it in an envelope. Put that envelope in a deposit bag. If you have a cash register, scan the z-tape to your bookkeeper, you shouldn’t need to do anything if you have POS unless your bookkeeper is a luddite.
