Proper cash management is important to your business. When you use bad cash handling practices, you increase your costs, increase your risks, lower efficiency and productivity, and inevitably end up losing out through wasted time, losses, and high expenses.
Unfortunately, it happens all too often in business—you’re so busy focusing on other priorities that you don’t even consider the way that your employees are handling your cash. You only realize it too late, when cash goes missing and your bad practices have already negatively affected your bottom line.
But once you realize that you are, in fact, an offender of bad cash management practices, you can take a proactive approach to prioritizing your cash handling. Better cash handling practices aren’t hard to implement. It’s understanding that what you’re doing is wrong that’s the hard part.
If you’re using any of these bad cash handling practices, it’s time to overhaul your cash management process for the better.
1. Cash Register Access
When you let more than one employee have access to the same register, you have no one to hold accountable if your cash doesn’t add up. If you’re over or short, you won’t know whose error it was—or who stole it. It might seem more convenient to let your employees share cash registers when one goes on break and another takes over or in similar situations, but this leads to a lack of accountability.
Having only one person per cash register will help you create a culture of accountability in order to identify employees with poor cash management skills or an inclination for theft, which will not only help protect your bottom line, but also your innocent employees.
2. Focusing Only on Shortages
It’s natural to care more about your cash shortages than overages. After all, these are the losses that you’ll have to incur. But this is a bad cash handling practice for several reasons.
For one, it means that you’re not worried about short-changing your customers—any deviation from the expected cash amount should matter to you and to your employees. Accuracy should be a priority. In addition, if you focus too heavily on shortages, this might make your employees feel like they must put in their own personal cash to cover accidental shortages in order to stay out of trouble—and this can also make them feel justified to take any overages at other times, too. And lastly, overages often occur because employees didn’t ring items through your company’s register system, which means your inventory counts will be off.
3. Poor Training
You need to set your employees up for success. It takes practice to become a good cash handler. It’s your responsibility to train employees properly on cash management practices. No matter how busy you are or how much training will increase labour costs, it should still be top priority. In the long run, this will reduce employee stress, protect your cash, and also reduce turnover.
4. Unsupervised Cash Counting
You might completely trust all of your employees, but that doesn’t mean that you should be lax about cash counting supervision. By allowing an employee to count and sort their own registers at the start or end of the night, without supervision, you’re giving them the opportunity to steal from you or to conceal cash handling problems by adding or subtracting funds without management knowledge. Always have two people present during a cash count if you’re doing so manually.
5. Manual Cash Handling
You might think that double counting everything is a good cash handling practice to increase accuracy, but it’s actually inefficient considering the technology available today. If you’re still manually counting, sorting, and processing cash, you’re losing out in terms of human error, theft, and time loss. There are many cash management solutions that you can integrate to increase efficiency and productivity as well as accuracy and speed.