Whether you handle high or low volumes of hard currency at your business, you need to implement and follow best practices for handling cash. Although you might not realize it, inefficient and lax cash handling processes can drive up costs, increase your risks, and lower your security.
If you don’t prioritize cash management at your company, you’re just going to lose money, waste time, and increase risks. And that isn’t good for business. It can and will end up having a negative impact on your bottom line.
Following best practices for handling cash can keep your employees and your money safe, can save you money, and can boost productivity.
Here are the best practices for handling cash all businesses should implement.
1. Cash Accountability
You must keep track of the employees who have access to your business’s cash. Accountability is key to reducing your losses. If a mistake is made or if cash goes missing, you need to be able to figure out what went wrong and who caused it.
You should note each employee’s cash handling responsibilities. You should know exactly where your money is at all times and who is handling it. All payments should have a cash receipt issued and recorded. Transfers of cash to customers should be documented. Supervisors should have to approve all voids and refunds and verify cash deposits. Every time your cash moves from place to place, you should know who’s doing it and when.
2. Duty Separation
When a lot of people are handling cash at the same time, you have a greater risk of error and fraud. Your employees should never share registers. This will make it too easy for one to steal and blame it on the other.
And if one or two employees are in charge of all of your cash management, you also increase your risks. You should be separating your cash handling duties among several people so no single employee has complete control over the process. Different employees should be recording cash payments than those who are handling the bookkeeping, depositing funds, or performing vault transactions. This will increase accountability.
Don’t let errors slip through the cracks. Put a system in place for checks and balances to ensure that employees have recorded cash transactions correctly. You should check your bank statements against your deposits and cash receipts, at a minimum, once a month, but more often is better. You should also be counting and balancing receipts on a daily basis and comparing receipts with deposit slips. Surprise bookkeeping record checks should also be conducted.
4. Cash Security
Keeping your cash safe means also keeping your employees safe, and this is your responsibility as an employer. Any time cash is counted, it should be done in a private area where customers cannot see. Your money should be stored in a smart safe vault that only a few approved employees have access to. Make it a habit to change passwords and combinations regularly, particularly when employees leave. Use the buddy system when transporting cash, such as for bank deposits. Minimize the amount of cash you have on site to avoid large losses from theft or fires.
5. Automate Your Cash Handling
Because handling cash is costly and risky, you should be taking advantage of available technology to reduce the costs and risks associated with it. Cash management solutions like cash counters and sorters, counterfeit detectors, and currency recyclers can streamline your cash handling processes, reduce human error, and increase accountability.