As a business owner, you need to take precautions to stop internal cash loss and avoid unnecessary losses. While you may not like to think about internal cash loss, you must acknowledge that this is an issue that you need to pay attention to. There a number of reasons why employees steal (financial need, a sense of entitlement, compulsion, and/or anger). Employee theft is just one component of retail shrinkage. Nearly half of retail shrinkage is the result of internal theft. This can be financially devastating for any business.
Implementing internal controls is an important part of cash management. We have come up with five steps that you can take to stop internal cash loss.
1. Train your employees thoroughly and have then sign off on cash handling procedures. Before being assigned to cash handling tasks, they must understand and accept their responsibilities related to cash handling. Proper training will reduce mistakes during transactions.
2. Let your employees know that you are paying attention. Perhaps your staff thinks you're preoccupied with other aspects of the business. Maybe they think they can get away with theft when you're not around. You can't be around all the time, so make sure your employees are aware that you are paying attention, that you are monitoring cash flow. Conduct random cash audits during an employee's shift to see if the cash drawer balances.
3. Review policies. Your employees need to understand that employee theft will not be tolerated and that precautions are being taken to eliminate internal theft.
4. If your cashiers are responsible for counting their cash drawers at the end of their shifts, do not give them the total figures to account for. If a cashier knows how much should be in the drawer, but there is extra, he/she might take the extra money.
5. Automate your cash management process. This will significantly reduce the risk of internal cash loss by eliminating/reducing the opportunities employees will interact with currency during transactions. An automated system will also eliminate employees' involvement with counting, sorting, reconciling, and depositing cash. Everything will be done automatically, removing the temptation to steal and removing accessibility to cash.
You work hard to earn money for your business. In today's competitive market, it's a challenge for businesses to survive and maintain profitability consistently. The last thing you need are dishonest employees stealing from your bottom line. Follow these five steps to stop internal cash loss.
