Outwardly, many of the most common cash handling mistakes can seem like wise business decisions. They seem to be effective ways of increasing efficiency and decreasing costs, and are undertaken by business owners in an honest attempt to help their businesses grow.
In reality, these common mistakes actually have the reverse effect, reducing efficiency in the workplace, and incurring significant financial losses. When considering your cash management procedures, avoid these five cash handling mistakes at all costs!
1. Double Counting
On the surface, double counting seems like a good idea. Being thorough is important, and double counting feels like a comprehensive way of catching any mistakes. However, double counting is actually counterintuitive, and not as thorough as it seems. If you didn’t notice a mistake the first time you counted, your brain is likely to make the same mistake the second time you count too. Double counting also costs money, taking up extra time that will directly result in higher labour costs. Labour costs are businesses’ biggest expense, and cash handling procedures should work to decrease them, not increase them.
2. Manual Counterfeit Detection
Never underestimate the ability of counterfeiters to produce currency that looks like the real thing. Many businesses persist in manual counterfeit detection because they believe that counterfeit money is easy to spot if you’re paying attention, but this is often not the case. While some counterfeit currency will be pretty obvious, counterfeit cash is getting harder and harder to detect. Trusting in manual counterfeit detection is a big risk, and no matter how observant your cashier is, the only way to make sure your business isn’t vulnerable is to invest in a counterfeit detector.
3. Sharing Registers
While it is true that sharing registers can save you time, the risks far outweigh the rewards. The small amount of time you save by having cashiers work off the same register comes with a hefty price, which includes less accountability, difficulty in tracking cash flow, and increased vulnerability to theft. If mistakes are being made on a register, it is imperative that you can track those errors to rectify the problem.
Sharing registers virtually eliminates your ability to do so, as you have no way of knowing with certainty who made the mistake. Moreover, if a cashier knows they can’t be held responsible for shortages, they are more likely to use that knowledge to their advantage. Internal theft is a big problem, and sharing registers makes you susceptible to greater levels of theft.
4. Unclear Policies & Procedures
It is crucial that you have firm policies and procedures on cash handling and that these are clearly articulated to all employees dealing with money. While tackling issues as they arise may seem more convenient, establishing explicit guidelines can save you considerable hassle. Employees handling cash are more likely to make mistakes if they’re not sure how to proceed in difficult situations. Additionally, an absence of clear policies conveys a lack of authority or consequence, and can create an environment where employees don’t take cash handling seriously.
5. Out-Dated Technology
Many businesses persist in using out-of-date cash handling equipment because it remains functional, and because they don’t want to cover the costs of new equipment. While using old technology may seem like the most cost-effective option, it is a mistake you should avoid making. Old technology is more vulnerable to frequent breakdowns (and therefore frequent and costly repairs). It’s more likely to run slowly, and in a business environment where speed is of the essence, this is a serious problem. Finally, outdated technology can’t compete with the high-tech equipment used by those that perpetrate theft.
