How Much Money Should I Keep in the Cash Drawer?

    Jul 02 2019

    Topics: Automated Cash Management

    How much cash should be in your cash drawer? It’s a key question for businesses of all sizes in many industries. You’re aware of the risks of having both too much and too little in the drawer. Finding the perfect balance is a challenge.

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    As you consider the question, you’ll want to be mindful of the following tips. With these tips in mind, you should be able to find the right amount to keep in the cash drawer.

    Too Little Cash Causes Problems

    If you’ve ever shopped at a store first thing in the morning, you might have noticed the cashier was less than enthusiastic when you handed them a large denomination for a small purchase. They’d just opened their till, and making change for the large denomination depleted their float.

    This situation can also happen if a supervisor or cash manager has just taken a pick-up from the till. They’ve left some cash in the drawer to make change, but it may not be enough.

    Cash managers work hard to make optimal floats, but the issue of having too little cash in the drawer is still common. Cashiers may have to buy change more frequently, and customers may need to wait since it takes longer to make change.

    Cashiers might also have to get creative if they don’t have enough in their till to buy change or if the cash office is low on funds. They may need to borrow from other tills, which can create headaches for the cash attendants who will reconcile the tills later.

    The Risks of Too Much Cash

    On the other hand, too much cash comes with its own issues. While it might seem impossible to have “too much” cash in the till drawers, large floats eat into your working capital. The money you have sitting in the drawers could be in your bank account instead.

    Having too much cash on hand also speaks to inefficiencies in your cash handling processes. This is especially true if you have days where you have too much cash, and other days where the floats are too small. This suggests you’re under- and over-depositing cash on an alternating basis. This leads to inefficiencies not just in floats, but in making deposits and scheduling CIT pickups. It could mean you’re running up extra fees as well.

    The Optimal Amount of Cash

    Just how much cash should you be keeping in the drawer? It depends on the average value of a sale in your business. If it’s under $200, then keeping about $200 in the till is a good practice. If your average sale is over that amount, you’ll need to adjust accordingly.

    You can split this amount up as you see fit, but you’ll want to include more of the commonly issued bills and coins. Your cashiers will likely hand out more $5 dollar bills than $10 dollar bills, so be sure to stock their tills with more of these bank notes.

    Cash Handling Technology Can Help

    As mentioned, the more cash you need on hand for floats, the less you have sitting in your bank accounts. If your business needs a large float, that can mean keeping substantial amounts of cash on hand.

    A coin and bank note recycler can help in this situation. You may not be able to reduce the float you need, you but can reuse some of the funds coming into your business. Instead of needing to supply cash from the outset, your cashiers can draw their float from the incoming funds.

    In turn, you don’t need to keep as much cash on hand. Your working capital is freed up, and your bank accounts get a boost.

    By keeping the amount of cash you need in the drawer to a minimum, you can mitigate risks.



    Andrea Lombardi

    Andrea Lombardi

    Andrea joined the CashTech team upon its inception in 2003. Learning the business from the ground up, she now utilizes her expertise in account management, planning, and negotiation while managing the daily operations of CashTech’s sales, marketing, and logistics departments. Andrea holds a bachelor’s degree from the University of Western Ontario. She enjoys travelling and has a passion for personal fitness, including obtaining her kettlebell certification. Andrea lives in Toronto with her husband and two young sons.

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