There are plenty of recommendations telling business owners to adopt “good cash handling practices.” If you’re a new business owner, though, you might wonder exactly what these “good” practices look like. Businesses usually have much more cash flowing through them, which means the personal rules of cash handling often go by the wayside.
Even if you’ve been in business for some time, it never hurts to review your own cash handling against current best practices. As business evolves, so too do the best ways to handle cash coming into the business.
Employees can also make the picture more complex. Not only do you need to know good cash handling processes, your employees must know them too. Effective training can protect your business.
One of the easiest ways to determine good cash handling processes is to take a look at what not to do. This guide illuminates some of the more common mistakes business owners encounter. Then it offers suggestions for what you can do instead.
Handling Everything by Hand
A common mistake new business owners make is assuming they need to handle cash the old-fashioned way. There are a few different reasons for this.
One is that they may not be aware of the technological options they have to automate the cash-handling process. A cash counter or sorter could reduce the amount of time it takes to handle cash, while also creating more accuracy and accountability.
Others might feel they’re not ready for one of these devices. Budgets can be an issue, but many devices designed with small business in mind are quite affordable. You may even be able to find a provider that offers a bundle of hardware, software, and support for an affordable monthly price.
The long and short of it is that you don’t need to handle all your cash by hand.
Having the Wrong Amount of Cash on Hand
Another common mistake is not keeping the business’s float at the right level. Some business owners keep too much cash on hand, while others don’t keep enough. In some businesses, the situation will reverse depending on the day.
Keeping up with cash is tough. You submit a bank deposit, only to realize you need more cash on hand to make change on a busy day. Another day, you might not have the time to get the deposit ready or run to the bank.
Having too much cash on hand can be tempting for dishonest individuals, which puts your business at risk. By contrast, having too little cash on hand could make it more difficult for you to make change or handle an emergency purchase for the business.
One way to deal with this difficulty is to ensure you’re reconciling cash drawers at the end of every shift, instead of waiting until closing time. Letting cash roll over between shifts makes it harder to track. It also makes it more difficult to hold someone accountable.
Reconciling more often also lets you keep a closer eye on the level of cash in the business. Technology can help here too, as most devices provide reports that could help you identify patterns.
Improper Staff Training
It can be tough to make sure your team is trained properly when it comes to cash handling. Some business owners assume their team members already know how to count back cash and other best practices. If you don’t have written policies and procedures or you’re making cash handling mistakes yourself, it’s even more challenging to have everyone handling cash the “right” way.
Introducing written policies and procedures is a great first step. Modeling them on current best practices is another. Then make sure you take steps to educate and train your team members, even if they’ve been working with you for a while.
By avoiding these common mistakes, you’ll be well on your way to better cash handling for your business.