Among the sea of tech wizardry, web-based applications and social media influence, the traditional stuff like the check-in at the hotel desk and tipping employees have maintained the conventionality of the industry.
That brings us onto cash registers, which are paramount as well as traditional when it comes to modern retail or hospitality business operations. Being a traditional machine, it is easier to get wrong, so here we bring you this one-step guide for how to balance a cash register drawer.
Firstly, come out of the notion that balancing a cash drawer is similar to balancing a check book, because it’s not. If you’ll fail to keep a record of your customer transactions for some time, you’ll eventually get off the track and struggle to keep track of your sales and incoming profit.
Balancing your cash drawer should be an important part of your routine and done at least once daily, if not multiple times a day (with changes in employee shifts). Retailers who have a habit of opening their cash drawer just to deposit money and not calculating the amount at the end of the day are doing themselves a great disservice. In this blog, we breakdown why it’s important to and how you can balance your cash drawer(s) like a pro.
THE IMPORTANCE OF BALANCING A CASH DRAWER
Cashless payment options may be on the up, but cash is still king when it comes to consumers.
As a merchant, you need to account for all the cash that enters your business, no matter the medium. Balancing a cash register drawer has to do with all kinds of payment methods including credit cards and checks. New payment methods like Apple Pay are gaining more popularity and need to be considered as well.
This keeps track of all the profit your business brings in and gives a clear picture of where your business stands in financial terms. It even helps you forecast and plan for potential peaks and troughs your business will experience.
We are not, in any way, telling you to not trust your employees, in fact, it’s good to maintain a reliable relationship with employees to boost their confidence. But because your business handles cash, there is always the option for the deceitful among the employees to take advantage.
It has been estimated that businesses lose a small share of their annual revenue to employee theft. This doesn’t mean you need to watch your back at every turn as the business owner but it’s imperative for businesses to implement effective cash handling practises while dealing with cash.
These practices will not only protect you as a business owner, but also your staff by holding all parties accountable to what goes in and out of your register. Most importantly, balancing your cash register help prevent shortages due to inaccurate cash handling or theft.
THINGS TO REMEMBER FOR BALANCING YOUR CASH REGISTER DRAWERS
Before getting into the process, take these points into consideration every time you balance your cash register.
Allocate One Person to Each Drawer, If Possible
It might be an easy way out to cut cost and have just one cash drawer for everyone, but it’s better to invest in more than a single cash drawer. When too many people have access to a single drawer or even a drawer key to the same till, the contents of the drawer become highly vulnerable to risk.
Initiate the Day by Counting your Cash Available in Cash Drawers
The first thing to do in the morning when you arrive at the store and the last thing to do at night before leaving the store should be counting total cash that’s already in the till.
Keep a consistent and enough float in your register to give change to your customers. Though the amount of cash that needs to be in the till differs from business to business, $100 to $150 should be enough for a small business.
Deposit Cash Throughout the Day
A tidy cash register is a healthy cash register. Be sure to choose an hour when foot traffic is slow for this activity; lunch time is probably the best to deposit as well as count the cash present in the till and notice if there’s any difference from your initial morning count. Count in the witness of another employee, be it the manager or your most trustful employee. Ensuring two sets of eyes on each deposit and count will reduce the chances of counting errors.
5-STEP PROCESS OF BALANCING CASH REGISTER
Now that you are aware of the basics, it’s time to get into the steps involved in balancing your cash drawers. To learn it by heart, simply print out the following list, stick on to the wall near each till and make it your team’s slogan.
Determine your Ideal Starting Amount (float)
While too much money in the drawer may incite theft, little or no money can prevent customers from completing their purchase. As mentioned earlier, it’s important to fill the till with a specific amount to give change to customers.
Decide on the base amount of cash you’ll keep in each drawer to handle the transaction your employees encounter each day. For better understanding of how much money you should keep, take help from the day-to-day revenue reports.
Keep One Employee Per Register
We have mentioned this in our quick considerations above, but mentioning again because the more you hear it, the better you grasp it. So, bear with it.
One employee per register means limiting the number of people who use each drawer. Limitation prevents cash drawer discrepancies and reduces workplace theft.
Run an X Read
When there’s a change in shift, run an X read in your POS system that allows the cashier to view a brief report about what value of cash is present in the drawer at any given time.
Conduct the Physical Count
Don’t depend entirely on technology and web-based reports, do the physical count as well. Tally up the sum of all coins, notes and eftpos receipts and compare the results to the totals on the X reads.
Keep in mind that it’s not unusual to have a minimal amount of cash shortages and these are more common than surpluses.
Don’t Forget the Cash Drop
A cash drop is when a senior staff member manually removes or deposit cash in the drawer to keep up with the customer transaction and maintain the base level of cash.
Over to You
No matter how technologically advanced we become, some advancements just can’t replace the essence of traditional things like the process of balancing a cash register that every business in the retail sector follows digitally as well as manually.
We hope you now have the required knowledge and cash management solutions to balance cash drawers between shifts and before you close out at the end of the business day.