Efficient cash handling is essential for any business that accepts cash, but for retailers, the sheer size of the task can be overwhelming – even for a small business. This guide covers all the cash handling procedures retail owners and managers need to know.
Cash Handling in Retail
While a lot of retail revenue comes from credit card sales, there is no doubt that cash is here to stay. Therefore, a successful retail business requires clear cash handling guidelines to ensure the store runs smoothly and profitably. You need to be able to track where your business cash is coming from, how much you have at any given moment, where you’ll store it before it goes to your bank, and more.
What is cash handling? Cash handling refers to all of the steps involved in cash revenue starting from the moment the customer pays for goods with cash. The cash handling process includes:
- Securely storing cash
- Depositing cash into a secure account
- Recording information about cash transactions
Streamline your retail cash management procedures with a high-quality cash handling service.
Routine Cash Handling Procedures in Retail
There are some proper cash-handling procedures that all retailers should be familiar with.
- Reconciliation: A manager counts the cash collected within a certain period, typically one business day. They ensure that cash receipts and deposits match.
- Security: Employees store cash in a secure location during and after business hours and during transportation to the bank.
- Separation of Duties: There are clearly defined roles for managing each part of the cash handling process from reconciling regularly to depositing cash in the bank.
- Documentation: Another manager is in charge of accounting for all cash transactions.
Cash Handling Problems in Retail Stores
If you don’t have a defined plan or a comprehensive cash handling service provider to manage all of these different elements, you could end up with a cash shrink problem. Establishing cash handling best practices can help you avoid some of the common problems of cash handling in retail and solve problems effectively when they do arise.
- Cashier Cash Handling Discrepancies
- Retail Cash Security
- High Volume Cash Handling
- Coin Delivery Challenges
The more times cash is handled, the greater the opportunity for errors and shrinkage. Even well-intentioned, honest employees can make errors when it comes to counting cash. These mistakes can add up quickly. For loss prevention, having designated roles for counting and depositing cash reduces discrepancies and limits how many hands are touching the money.
Even if you are using a high-quality safe, nothing is 100% secure. There is always a possibility of cash getting stolen while at the store or while in transit to the bank. CCTV cameras help deter and catch criminals. Also, consider using a Point-of-Sale (POS) system or smart safe to securely store money and prevent internal and external theft. These solutions can even detect counterfeit money right away to prevent fraud.
The larger the amount of cash your business is handling each day, the higher the risk of discrepancies and security breaches becomes. High volume cash handling may also mean more trips to the bank and higher bank fees. Using an armored delivery service can reduce the amount of time that employees are off-site. This also allows you to deposit cash into your business account on a consistent schedule.
Another part of the cashiering process in retail stores is keeping cash registers stocked with enough coins to provide cash customers with the correct amount of change. Yet, ordering coins can be difficult for the following reasons:
- Coin shortages
- Missed deliveries
- Busy weekends
- Bank holidays
Reconciling your electronic cash registers daily and keeping organized receipts and records can help you plan ahead to avoid these change challenges.
Become an expert at accurate cash handling to maximize your retail store’s cash revenue.
Retail Cash Handling Best Practices
Ideally, retailers should follow a cash handling plan designed to efficiently and securely manage their business cash, their POS system, and their cashiers.
These best practices will help you do just that
- Define Your Cash Handling Policy and Procedures
- Distinguish Cash Management Roles
- Streamline Secure Cash Drop Procedures
- Keep a Papertrail
Cash handling policies are important internal controls, so explain your business’s cash handling policies and procedures in detail on paper. Offer training for new employees on how to handle cash in retail and cash register procedures. Even for employees with previous retail cash drawer experience, training is key to ensuring they know your business’s specific policies.
Having delineated cash management roles increases accountability for the cashiering process in retail stores.
- Counting: Consider designating two different, trustworthy managers to be your cash counters. This can minimize the margin of error. If they get different numbers at the end of the day, they should both recount.
- Reconciliation: This role involves handling cash register reconciliation at the end of each business day for each POS cash register. This important cash handling duty is often referred to as cashing up in retail.
- Accounting: An accountant can keep track of all cash revenue so that you have accurate documentation of the cash coming in and out of your business down to the penny.
Moving cash from the register to a safe creates the opportunity for theft or accidental money loss. Secure cash drop procedures are essential. Having a witness helps increase accountability among employees during cash drops. Have a system in place for designating cash drop roles and documenting the drops in detail.
Improve your retail cash management procedures to mitigate risk and reduce overhead costs.
Customers who buy items with credit or debit cards leave a record of their purchases that ties their transactions to the items they’ve purchased. The right approach to retail cash handling does the same thing. With the use of technology, it’s easy to create a paper trail with minimal effort. With some cash handling service providers, online web portals can help you keep track of your cash flow.
New Cash Management Solutions for Retailers
As technology continues to advance, so do cash management solutions for retailers. When you standardize your cash management procedures and outsource your cash handling, you can save yourself a lot of time, money, and frustration.
All-in-One Retail Cash Management Systems
With traditional procedures such as safes and armored truck pickups, the retailer holds the responsibility and liability for the cash while it is stored at the business and while it is being transported. However, some newer solutions immediately transfer the liability for the cash once it’s deposited into an on-site safe by the retailer.
Integrated Cash Logistics is an all-in-one retail cash management solution. They take the onus of retail cash control off of employees and into the hands of experts using technology to automate the cash management process.
Learn more about the benefits of a cash management service from Integrated Cash Logistics’ blog.
Cashier Training Programs
Cashier positions are often entry-level and may not need training. On-the-job training should focus on teaching your business’s cash handling procedures for cashiers. For extra training, cashiers can choose from a variety of e-learning programs that include online retail cash desk simulations to provide practice in a risk-free environment. Many of these online training programs are free or low-cost.
Simplify Retail Cash Control with Integrated Cash Logistics
The right approach to cash handling allows you to take control of the revenue you’ve worked so hard to earn. Even small discrepancies can add up to big losses, and if you do not have a good system in place for money handling, you will never know what you should have in your registers.
Integrated Cash Logistics cash capture technology can simplify your retail cash management system and provide more security than traditional smart safes.