Retailers who take more credit card payments or checks than cash will not usually need much change on hand. But it's always wise to have a little more petty cash available than you think you will need.
The question of available cash should be addressed during the business planning stage while establishing store procedures. When deciding how much change to keep in-store, business owners should consider a variety of factors.
How Much Money to Keep in the Cash Register
It may take a few weeks of dealing with the public before you can determine exactly how much money to have on hand and in the cash drawer. The amount of money a retailer should keep in the store will vary by:
- Predicted or typical volume of sales.
- How safely money can be stored.
- The type of payments customers usually make.
As part of your store procedures, set the dollar amount of cash that will be in each register or cash drawer at the beginning of the day. For example, if your average ticket is under $200, you may want to start with $200 per drawer or register. This amount should be evenly distributed among different bill denominations. Rolled coins come in set amounts; you should have even distribution of each, including pennies.
With customers frequently using credit cards, debit cards, or mobile payment methods, most retailers can keep a relatively small amount of cash available.
Check the number and dollar amounts of both bills and rolled change each day to make sure your store never runs short. If you find that you are constantly running out of a certain coin or bill, try increasing the amounts of each denomination you in your daily starting amount,
Balancing the Cash Register
In addition to determining the beginning amount of cash in the register, you will also need to set a maximum amount. When the amount of cash in the register exceeds that maximum amount, the extra will need to be put somewhere secure.
Pulling money from the cash register and taking it to the store safe is sometimes called a "cash drop."
Pulling excess money from the cash drawer during a shift is part of balancing the register, and it is good cash management. This reduces the amount of money on the sales floor and is especially useful during heavy sales times like the Christmas shopping season. Although every business wants high amounts of cash rolling in, it's best not to have it too visible for safety reasons.
In addition to the maximum amount for each register, retailers may want to keep an additional amount of cash and rolled coins in the safe to serve as an in-store bank. The petty cash that will be available at the start of each day should also be established as part of your store procedures and can be used for:
- Unforeseen situations, such as running out of paper products in the restrooms.
- Occasional expenses, like treating the staff to coffee.
- Balancing the register during days with a high volume of sales or an unexpected number of cash transactions.
Access to a store's safe should be limited to trusted personnel.
You will also need to balance the register at the end of the day. When pulling all of the cash over the drawer limit, try to match the bill distribution to your starting point.
Pulling out cash that exceeds the maximum amount at the ends of the day is sometimes called "cutting the drawer."
Most retailers do not count the change for this purpose, only the bills. If your standard drawer amount is $200, you would leave $200 in bills in the drawer and only pulls change when the drawers get too full. However, some retailers pull the change as well for continuity.
If you leave the change in the register, you will still need to count all of it at night to balance the drawer. This provides a check and balance system to help deter internal theft.
Each night at closing, balance the cash drawer back to the starting amount. The amount of cash over the starting amount is your daily deposit and should be prepared according to your operating procedures. If possible, two people should be involved in counting the cash drawers and preparing the deposit in order to minimize errors or fraud.
Many retailers take deposits at night, but that can lead to safety concerns. You don't want to endanger yourself or any employees by making them the potential target of a robbery. This is another time having a store safe is useful: many retailers choose to secure the money overnight in the safe and make the deposit at the bank during the day. If possible, two people should make each deposit as well.