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Cash is more than just coins and currency in the business world. It also includes checks, credit card transactions and money orders. By using best practice techniques for handling cash, you help reduce errors and ensure accountability, even if the amount of cash you handle is low. By creating and implementing cash handling controls, you can create an efficient process for managing outgoing payments and money you receive.
Keep track of the individuals that have access to a company’s cash and note each person’s cash-handling responsibilities. You should know where your company’s cash is at all times and be able to trace irregularities to specific individuals. You can achieve this by making sure each payment has a cash receipt issued and recorded, giving each customer a receipt and documenting any transfers. A supervisor should always approve voided or refunded transactions and verify cash deposits.
When one or two have the responsibility to handle cash, there is a greater risk of fraud. By separating cash handling duties among several individuals, a single person cannot have control over the cash handling process. Have different individuals record cash payments to bookkeeping records, receive money, deposit funds, reconcile cash payments in bookkeeping records pay bills and hand out paychecks. When you separate cash handling duties, each individual is accountable to the others in the cash handling process.
When you have cash reconciliation practices in place, you can confirm that employees recorded the cash transactions correctly and have a system of checks and balances. At minimum, you should check your bank statements against your cash receipts and deposits on a monthly basis. In addition to recording cash payments as soon as you receive them, count and balance your cash receipts every day and compare all receipts with deposit slips. In addition to a scheduled monthly cash reconciliation, conduct a surprise check of the bookkeeping records every month.
Whenever a business handles cash, it is important to keep the money and employees safe. To protect your financial assets, always conduct background checks on prospective employees before extending job offers. Always keep cash locked in a safe place and detail your cash-handling policy in the employee handbook. Limit the number of people who have access to cash to as few as possible and only give passwords and combinations to approved staff. Every year, or whenever an employee who handles cash leaves the company, change all the combinations and passwords. Whenever an employee counts cash, she should do so in a location that the public or customers cannot see. When taking cash from one place to another, like to make a deposit or if your business has a large campus, use the buddy system. Always minimize the amount of cash at your business overnight so you do not suffer a large loss in the event of a fire or theft.
Flora Richards-Gustafson has been writing professionally since 2003. She creates copy for websites, marketing materials and printed publications. Richards-Gustafson specializes in SEO and writing about small-business strategies, health and beauty, interior design, emergency preparedness and education. Richards-Gustafson received a Bachelor of Arts from George Fox University in 2003 and was recognized by Cambridge's "Who's Who" in 2009 as a leading woman entrepreneur.