While paying by credit card, debit or mobile pay is common in many industries, some people still prefer to pay by cash. Having a cash float, which is the money you have in the register to give customers change when they pay in cash, is an important business process. If you have too little float, you may run out of certain denominations and end up with angry customers. If you have too much float, you may need to do a cash drop in the middle of the day to discourage theft.
Review Your Total Cash Sales
Determine the right amount of float you need in the cash register by looking at your total sales. Separate your cash sales from all other forms of payment. You will only offer change in cash when someone pays you in cash, so for this purpose, you can disregard all credit, debit or mobile pay sales.
Review the percentage of your sales that are made in cash. You will want to take the average over a few days so you can have a more accurate account of how many of your customers prefer to pay in cash. For example, if only 5% of your clientele pays in cash, then you know that your cash float will likely be a smaller amount than if 50% of people pay in cash. In most businesses, having a cash float of $150 to $200 is the norm.
Determine Your Till Float By Looking at Your Prices
Figure out what your most common sales totals for cash are. Look at your cash receipts and see if you can spot any common elements. It may be useful to make a list of your most common cash totals. Don’t forget to factor in sales tax if it is applicable for your area.
Keep in mind that you will not need to have enough cash at the start of the day to provide change to all of your customers. Remember that you can also use the cash they use to pay you with to offer other customers change as well, especially if they pay with small denominations of money. Your till float will need to have enough cash to offer a percentage of your customers the change they need. You can determine what percentage by reviewing how many of your customers pay in cash, and what common bills and coins they use to pay you with.
Once you know the most common cash totals, you can begin to figure out how much change you will be handing out. For a cash float example, if one of your most common cash totals is $45, it’s likely that the customer will hand you a $50 bill. As a result, you will need many $5 bills to give out as change. If one of your most common cash totals is $1.50, then your customers may hand you $2 or $5. As a result, you’ll need to make sure you have plenty of $1 bills and quarters ready to offer your customers change.
Calculate the Denominations You Will Need
Figure out what denominations of bills and coins you will need, and how many of each you will need to carry you through. For a $150 cash float breakdown where your primary cash sale total is $4.50, you will need to ensure you have many quarters and $5 bills, because your customers may hand you a $5 or $10 for the sale. As a result, it would be wise to have at least $50 in $5 bills, and $10 in quarters. You should also consider including other denominations, such as one $20 bill, three $10 bills and 30 $1 bills. Some customer totals may require other change, so be sure to have $5 in dimes, $4 in nickels and $1 in pennies.
- Consider keeping extra float in a locked safe at your business. Getting money out of a safe takes less time than going to the bank.
Anam Ahmed is a Toronto-based writer and editor with over a decade of experience helping small businesses and entrepreneurs reach new heights. She has experience ghostwriting and editing business books, especially those in the "For Dummies" series, in addition to writing and editing web content for the brand. Anam works as a marketing strategist and copywriter, collaborating with everyone from Fortune 500 companies to start-ups, lifestyle bloggers to professional athletes. As a small business owner herself, she is well-versed in what it takes to run and market a small business. Anam earned an M.A. from the University of Toronto and a B.A.H. from Queen's University. Learn more at www.anamahmed.ca.