While it's all well and good to recommend a business adopt good cash handling practices, a new business owner may need some guidance as to what that means. Handling business cash is not in all respects like handling personal cash, especially if there is a much greater quantity of cash coming into the business than the personal cash one keeps on hand.
This is especially true for people who make a habit of using credit or debit cards for most personal transactions rather than cash. The situation gets more complicated again when there are employees in the picture. A business owner needs to both train employees to good cash handling practices and set safeguards in place against cash shrink.
As a guide toward better cash handling procedures, here are a few of the common mistakes business owners make in cash handling, with suggestions for what you could do instead.
Untimely Cash Management
Keeping up with cash at different stages is one of the best things you can do to keep track of your business cash. The longer you wait to count cash, deposit it at the bank, or even reconcile cash drawers over the course of a day's business can mean a greater risk of mistakes slipping through or dishonest individuals taking advantage of the availability of your business cash.
One basic control you can put in place is to reconcile cash drawers at the end of every shift. Letting cash roll over from one shift to the other can cause problems with accounting, and it also blurs the lines of responsibility for what is contained in the register. If every cashier is only responsible for the actual transactions they handled, it becomes easier to identify mistakes sooner and to tell who is responsible for discrepancies.
It may be tempting to avoid the hassle of reconciling drawers after every shift, but it can help to prevent a lot of problems (and having a good cash management task flow including appropriate use of bill counters or coin counters will take a lot of the pain out of the process).
Sloppy Transaction Practices
If you or your staff do not make a point of having good practices around handling customer transactions, you are creating another potential area of mistakes and cash loss. A busy cashier may be tempted to try handling multiple customer needs at one time, including multiple transactions, but this is not the right way to provide great customer service. It increases the chance of making mistakes in those transactions, and also means that the customers a cashier is trying to interact with only receive partial attention.
Transactions should only be handled one at a time. Cashiers should also be trained in correct change making procedures and required to follow them, even when business is brisk and there is a temptation to cut corners. Cash received from a customer should be placed on the register, not in the cash drawer, until the customer receives their change.
Counting the change back to the customer also helps to prevent mistakes, as well as demonstrate to the customer that they are receiving the right change. Following this process only adds a few more seconds to each transaction, but it can head off a world of cash management problems.