Best Practices for Cash Handling (2024)

Small businesses and food service establishments need to be able to accept cash in addition to credit card and smartphone payments. But when business is booming, it’s easy for small mistakes to turn into big accounting headaches. Employees must be aware of cash handling best practices to ensure it is handled correctly.

Cash is popular, especially for small purchases: one Federal Reserve study found that nearly half of payments under $10 were made in cash. Following the proper procedures for handling cash will result in fewer errors. Keeping this in mind, here are some best practices for cash handling.

Set Staff Up for Success

Whether you run a restaurant, boutique, or convenience store, you likely have multiple different staff members handling money. That’s not a problem when you have standardized policies and procedures across all your locations and registers. A cash-handling policy is a critical tool for small businesses to maintain accurate bookkeeping and minimize the risk of waste, fraud, and abuse.

An important first step of a cash-handling policy is implementing effective cash-handling training. Ensure that each employee who handles cash has received comprehensive instruction on your practices. Always confirm the amount of starting funds in a cash drawer and the amount at the end of an employee’s shift. This helps you keep track of any mistakes an employee makes and stay organized as money moves through your business.

Having proper staff and an engaged team is critical, as well. If your business is shorthanded, employees are more likely to rush and make mistakes when preparing deposits or issuing change. Even with video surveillance that oversees cash handling, you should never have only one staff member onsite.

Cash Handling At the Register

While you want to ensure a positive customer experience, you also need to protect your staff and your bottom line. Limit the number of employees who handle cash, and be careful that those who do are storing it properly or calling on a manager when they need help. Consider implementing these six cash-handling best practices at the checkout or register:

1. Examine all bills greater than $20

Ending up with counterfeit money is never a good thing. Even though it may be busy, take a few seconds to examine any bill over $20 the bill to ensure that it is real. Look for watermarks and other marks of authenticity or use your counterfeit pen on the bill.

2. Store all large bills underneath the register

Keeping larger bills (anything $50 and over) underneath the register helps keep the cash drawer organized. Tucking them away ensures they won’t accidentally be given as change and keeps them out of sight from quick-change scam artists or those looking for stores that might have larger amounts of cash in their nightly deposits. Make that you have a secure container to keep these bills in to prevent them from getting lost when using this method.

3. Place customer cash payment across the register

Placing the cash across the register helps to confirm both you and the customer are aware of the type of bill handed over. This eliminates uncertainty if payment or change is questioned and makes it very easy to re-confirm the amount of cash the customer paid versus the change that was given back.

4. Verbally confirm cash received and change

When possible, employees should state the amount of cash the customer hands over to prevent honest mistakes, such as a customer handing over a $10 bill when they thought they took out a $20. Employees can also count back a customer’s change out loud to reduce confusion.

5. Alert management when cash is over defined limits

Keeping your cash drawer organized is easier when it’s not overflowing with bills and receipt slips. An overstocked till can lead to bills slipping out, getting stuck together, or other simple errors that lead to cash loss. Once a till holds a certain amount of cash, it is safest to bring cash to a designated safe or a manager’s office to be stored safely until the money can be moved off-site.

6. Audit the register if a customer believes they were short-changed

Auditing the cash drawer when a customer questions their change will assure them that they have not been short-changed and offers employees peace of mind.

7. Use technology to ensure counts and audits are accurate

Integrating your point of sale (POS) software with intelligent video offers a sophisticated solution for reviewing specific transactions and ensuring the customer receives the proper amount of change. Depending on the technology provider you choose, the features often go beyond just one beneficial feature to your business.

When in doubt, make sure employees know that they can call on their supervisor for assistance. Set clear policies about when to involve a manager in a transaction, such as when a customer requests a refund or wants to return an item without a receipt — this can all be outlined in cash-handling training. At the end of their shift, each employee should know the proper procedure for closing out their register and turning over cash to be deposited.

Best Practices for Deposits

Whether your team is using an onsite smart safe or preparing a deposit to take to the bank, it’s important to have internal controls in place to mitigate risk and prevent errors. These include:

  • Separation of duties: You need a system of checks and balances to minimize the risk of errors or fraud. If one employee prepares a cash deposit, a different employee should make the deposit.
  • Consistency: Always use a consistent process when counting cash, such as counting bills from lowest to highest denomination.
  • Count in private: Do not count cash out in the open, which could put you at risk of theft. Instead, count in a private area with at least two employees present, preferably with video surveillance.
  • Keep accounts separate: If you’re preparing to deposit cash in different accounts, make sure to record and store those monies separately.
  • Check your work: It’s a good idea to count cash twice and review your deposit slip thoroughly before completing a deposit.

Keeping a large amount of cash at your business is a security risk, so it’s best to have a set schedule for making cash deposits. Plus, the more cash you have onsite, the higher the risk of errors or disorganization. Some businesses set a limit on how much cash they keep in their registers.

The right technology can improve your cash-handling experience and establish a digital paper trail. An automated cash management system eliminates the manual process of counting cash and creating deposits. This reduces the chances of human error and saves significant staff time, which can then be reallocated to other tasks.

Credit Card and Smartphone Payments

Not all payments will happen with cash — you also want your team to be confident when accepting payments via credit card or smartphone.. While errors are less likely with these methods than with cash, it’s still important for staff members to be diligent when accepting any form of payment. Make sure your employees are implementing the following practices:

  • Track all transactions: Your POS should be integrated with your accounting software. This creates an audit trail for all types of payments, helping to reduce the likelihood of bookkeeping errors.
  • Use chip cards properly: If a customer’s credit card has a chip, an employee should always process their payment by inserting the card, not swiping it. Microchips offer a much higher level of security than magnetic strips, which generate static data that can easily be stolen and fraudulently used.
  • Record customer information: Ensure employees are collecting sufficient information if your business accepts credit card payments over the phone. This includes the customer’s full name as it appears on the card, the complete card number, expiration date, and security code, as well as the customer’s billing address and phone number.
  • Verify customer information: Have employees request to see a customer’s photo ID for large purchases via credit card or mobile payments.
  • Learn from your audit: An audit can be a stressful process – but it’s also a rich source of advice. If you’ve recently had an internal or external audit, take the time to go through the auditor’s report and look for areas where your company can improve.

With mobile payments becoming more and more common, businesses may need to provide additional staff training. Luckily, accepting mobile payments is generally a simple process and is just as secure as using a credit card.

If your business offers gift cards or you accept less common payment methods, such as personal checks, make sure you’ve taken time to train your staff on handling those payment methods.

Improve Cash-Handling Training With Help From DTiQ

With all the daily demands of running a business, it can be difficult to focus on all the small details of cash handling. That’s where DTiQ comes in. Our SmartAudit tool gathers powerful insights to help you improve your business practices. DTiQ uses advanced video analytics to review cash-handling procedures, so you can target your training and improve your bottom line. DTiQ’s SmartAudit can flag several issues, such as:

  • Unsecured tills or safes
  • Open cash drawers
  • Cash left out on counters or desks
  • Dropped bills
  • Lack of single-drawer accountability

Plus, DTiQ can design custom solutions to help you with operational efficiencies and loss prevention strategies. We work on a subscription service model, so there’s no capital expenditure, and you’ll always have the most up-to-date software. For more information about our services and pricing, book a demo today.

Best Practices for Cash Handling (2024)


What are the 5 principles of good cash handling? ›

General Cash Handling Principles
  • Stewardship. The careful and responsible management of something entrusted to one's care. ...
  • Accountability. One person has sole responsibility for a fund. ...
  • Separation of Duties. ...
  • Physical Security. ...
  • Reconciliation.

What is the best practice for handling money? ›

Handling and Safeguarding Cash

During business hours, all forms of cash should be stored in locking drawers, cash registers, and cash boxes. – Only the cashier collecting these monies should control over this cash, and make sure that the cash is securely locked when they take lunch, or a break.

What are the guidelines for cash handling? ›

Doors should be locked at all times in areas where cash is handled. Large sums of cash should be counted and handled out of sight of the general public. Individuals should keep working cash funds to a minimum at all times. Excess funds should be in a locked device or deposited in the Cashier's Office.

What are the 3 golden rules of money management? ›

Basic money management starts with this rule. If you always spend less than you earn, your finances will always be in good shape. Understand the difference between needs and wants, live within your income, and don't take on any unnecessary debt.

What is a cash handling skill? ›

Cash handling skills are the necessary abilities you use to succeed in a role that involves handling cash, such as a retail cashier . The job may also include managing financial transactions, assisting customers who are making purchases, scanning items and handling a cash register or point-of-sale (POS) system.

What are the three components of cash handling? ›

Cash handling duties can be divided into three stages: receiving, depositing, and reconciling. Ideally, all three stages would be performed by different individuals. The purpose of this segregation of duties is to minimize the opportunity for an employee to misappropriate funds and avoid detection.

What is the 50/30/20 rule? ›

The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals.

What is the 3000 cash rule? ›

Funds Transfer and Travel Rule Requirements

Treasury regulation 31 CFR Section 103.33 prescribes information that must be obtained for funds transfers in the amount of $3,000 or more.

What are the 5 specific control activities in cash? ›

These control activities include segregation of duties, proper authorization, adequate documents and records, physical controls, and independent checks on performance. Segregation of duties. Cash is generally received at cash registers or through the mail.

What are 5 general control procedures for cash and bank? ›

  • With each deposit - Cash = Deposit = Credit to bank account. ...
  • On a routine basis. ...
  • Monthly, balance accounts as follows: ...
  • Step 1 - Accept cash/checks/credit cards. ...
  • Step 2 - Prepare deposit. ...
  • Step 3 - Deposit cash. ...
  • Step 4 - Reconcile deposits. ...
  • Step 5 - Report losses.

What are 4 principles of money management? ›

WHAT ARE THE FOUR PRINCIPLES OF FINANCE? The four principles of finance are income, savings, spending, and investing. Following these core principles of personal finance can help you maintain your finances at a healthy level. In many cases, these principles can help people build wealth over time.


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