Tax Talk & Business Tips

Here’s a practical guide to help you implement strong cash handling procedures in your business.

Establishing a Consistent Cash Drawer Process

A well-managed cash drawer starts with consistency.

Most businesses maintain a base amount of $150–$200 per till, though this may vary depending on your volume of cash transactions. At the end of each day, remove any cash above that base amount and prepare it for deposit. This ensures your opening and closing balances remain consistent.

To maintain accuracy:

• Assign one employee per till per shift whenever possible
• Balance the till at the end of each shift (or at minimum, once daily)
• Always count all cash, including coins—skipping this step can lead to discrepancies over time

While counting cash may feel time-consuming, it is a critical safeguard. Many businesses invest in cash and coin counting devices (often under $100) to improve efficiency.

Before opening your store, make sure the till is properly “opened” in your Point of Sale system. Failing to do so can result in mismatches between recorded sales and actual cash on hand.

Reducing Risk and Preventing Errors

Strong cash handling practices also help protect your business from loss.

• Check all bills over $20 to avoid counterfeit currency
• Store larger bills underneath the cash drawer to prevent accidental use as change and reduce visibility to potential theft
• Count cash in a private area, away from customers

Consistency in your process is key. Always follow the same steps when counting and closing out a till to reduce human error.

Properly Managing Cash Tips

Cash tips require careful handling to ensure compliance and accurate payroll reporting.

• Keep cash tips separate from regular cash until they are recorded
• If your POS system doesn’t track cash tips, record them using a $0 transaction (or similar method) at regular intervals
• Maintain a simple tracking spreadsheet (date, amount, etc.) in case of a labor audit

Once recorded, tips can be deposited with other cash and included in payroll processing.

Important: Always distribute 100% of collected tips to employees. Using tips for other purposes—even with employee agreement—can result in significant penalties.

Managing Change and Cash Reserves

Keeping an organized reserve of change ensures smooth daily operations.

We recommend maintaining a cash reserve (e.g., ~$250) in your safe, with a mix of denominations (ones, coins, etc.).

Best practices include:

• Replenishing tills by exchanging denominations from the safe—not from other registers
• Exchanging excess cash at the bank rather than withdrawing new funds
• This helps avoid discrepancies and keeps your books accurate
  
  

Secure and Accurate Deposit Procedures

A structured deposit process reduces risk and improves accountability.

• Have one employee prepare the deposit and another deliver it to the bank
• Count all cash twice before finalizing the deposit
• Review deposit slips carefully (watch for simple errors like misplaced decimals)
• Always count cash in a secure, private setting with two employees present

For added efficiency, some businesses open a separate bank account at a nearby branch specifically for handling cash deposits and exchanges.

How Often Should You Deposit Cash?

Regular deposits help maintain clean records and reduce risk.

• Ideally, deposit cash daily
• At minimum, deposits should be made at least once per week

Frequent deposits reduce the amount of cash stored on-site and improve financial tracking.

Final Thoughts

Effective cash management isn’t just about balancing numbers—it’s about creating systems that protect your business, support your team, and ensure financial accuracy.

By implementing consistent processes, maintaining clear records, and enforcing checks and balances, you can reduce errors, prevent loss, and operate with greater confidence.

 Need Help Keeping Your Financial Systems Organized?

At Certus Accounting, we help business owners implement processes that bring clarity and control to their finances—from bookkeeping to cash flow management and beyond.

Connect with our team today to learn how we can support your business.