Cash Management and Cash Handling

*Recommended cash management practices:

A good place to start on the topic of cash management is the detailed summary in a 2012 Cooperative Grocer article, "Accounting Best Practices: Cash Management," by Bruce Mayer, Peg Nolan, and Steve Wolfe (to be part of a new collection on accounting best practices). That article as well as an "Accounting Best Practices Primer" are linked from the present page under Related Content.

Many other past articles covering financial resources and concepts can be located through a Library search of articles and wikis on the present website.

*Cash back for card purchases:

There are many aspects to accurate and secure cash handling, from the register to making deposits, and co-op managers have shared numerous details. 

See also the wiki on “Customer Payment Methods,” which discusses the use of bank cards.

One cashiering issue --also discussed in the wiki on POS (Point of Sale) systems -- occurs when customers use bank cards and receive cash back at the register. This requires double entry and is a frequent source of cashier error – unless the bank card terminals are integrated with the POS.  As summarized by Wheatsville Co-op’s store manager, Bill Bickford (July 5, 2012):

       “Are your bank card terminals integrated with your POS?  The reason I ask is that we used to have lots of cash back issues pre-integration.  Once we integrated the two systems when we installed Catapult, the problems disappeared overnight.  Cash back errors are now exceedingly rare.  The primary reason for that is that double-data entry is no longer required to alert the POS to the cash back.  If the drawer pops, there's obviously cash back.  If it doesn't, there's not.  

        “Prior to that change, the only thing that ever had any significant impact, quite honestly, was following progressive discipline through to termination on cashiers that had the most consistent issues.  That's not a fun answer, but it's also true that some were far worse than others at remembering cash back.”

*Cash handling procedures, store-wide:

Several questions concerning store procedures for handling cash were addressed in a listserv discussion (May 16, 2012) by Zac Hamlin, frontend manager at The Merc:

       “Who counts the money in the Front End, shift leads? cashiers? a designated position just for counting? In our current format the cashier is responsible for counting their day's business and rectifying it on a daysheet. Once the Deposit has been figured and pulled the Head Cashier (our shift leads) verifies the info on the daysheet and double checks the deposit, then both folks sign off on it. 

        “How is the money counted? …All tills start with $200 cash built with a loose recipe of bills and coin. And the inventory is accounted for on a ‘starting change sheet’ To that end we count money by hand. We have looked into machines before and the cost/benefit seems promising, but we haven't pulled the trigger on it.  

        “Double count? Yes, as mentioned above both a cashier and head cashier count and approve the financials that are passed to finance. Our store administrative assistant enters the numbers from our deposit bags into the excel document finance uses; this gives us a quadruple check. Cashier->Head Cashier->Administration-> Finance. Any error unfixed by the HC is passed to the Assistant Front End Manager or myself.      We have mechanisms that track individual and team variance (the way I approach long/shorts, effectively we are using an absolute value of the long/short) and individual sales per labor hour. These two metrics demonstrate our efficacy.  Our team hourly variance runs between 5 and 7 cents per hour. And Team SPLH hovers in the $410's range.  

        “Do you have a money counter?  Nope, but it sounds good.      

        “How are your safes set up? We have 11 cash tills @ $200 and keep cash on hand at an additional $2000, again with a build to recipe for bills and coin. The opening head cashier writes the change order in the morning and counts the safe in and out. The closing head cashier also counts the safe in and out giving us no less than 28 counts per week. Rarely is the safe dead on $2000, but it also doesn't often change (i.e. it may be at $2005 for several weeks). Only the head cashiers, AFEM and Front End Manager have the safe code so we also use it as a gateway for the manual checkbook.  

        “How many times do you have deposits picked up a week? We have our deposits picked up 6 days a week (our bank is closed Sunday).         

        “Is it every day? We have a contracted, bonded courier who picks up the change order from the bank, delivers it to the store and returns our deposit and payment for the change order to the bank.”

            More detail on secure and accurate cash handling procedures was added by Bill Bickford of Wheatsville Co-op:

       “Much of what Zac describes is true at Wheatsville as well, with a few differences.  

        “Front End Clerks count their till at the end of their shift, but it is blind.  They do not know what total they are ‘supposed’ to have.  The Operations Lead on duty (previously called Floor Manager) verifies and/or corrects that count and reconciles the drawer in the POS after the FE Clerk is done.  All drawers start at $250 and are returned to $250 after the Ops Lead has verified it.  The amount over that goes into the ‘beige box’ in the safe (basically a combined mega-till) after the drawer has been reconciled.  I think we now have 16 tills in the safe, of which we actually use 12 to 14 on a given day.  The others are extras in case of split-shift coverage or someone jumping in during an unexpected rush.  

        “Clerks all receive their own till; there is no sharing (or very nearly none...emergencies happen, of course).  When they go on break, they store their till in a locked cabinet at our Hospitality Desk and a mid-Ops Lead, responsible for the majority of the team's breaks, puts their drawer in its place.  

        “In the morning, the opening Ops Lead reconciles the safe and puts the deposit together.  That means they count the money in the 16 tills, the beige box, and what we call the ‘bank,’ which is the extra small bills and coin rolls loaned into drawers throughout the day as needed.  Unlike the Merc, we only place a change order once a week, barring a run on a particular denomination, which means our bank is probably a bit bigger.  We recover small bills and coins to the bank as much as possible during the reconciliation process(es).  

        “All steps after that (reconciling the sales report, etc.) are currently handled by the Finance Team, which was a change about four years ago.  I like it better that way, personally, as separating that responsibility creates more cash accountability and less fraud opportunity.  However, it's up for discussion again as we review our cash and accounting processes in preparation for a second store.  

        “One thing I would strongly recommend to everyone is a good bill counter as well as a change scale.  We've had a bill counter for several years.  The first one we bought crapped out pretty quick, but the second one has been going strong for more than 5 years now.  Frankly, I can't imagine going back to hand counting.  For us, hand counting is generally only done to verify discrepancies.  If the machine count comes up right, you move on.  The change scale was added more recently.  It doesn't work well for pennies, as the gubmint has wildly varied the ratio of copper to pot metal in them over the years, but it's pretty damn accurate on everything else.  

        “Think of it this way...if you shave 5 minutes of count time off each cashier shift, say 10 shifts per day at an average of $10 per hour (feel free to use your own actual numbers), you'll have saved over $3000 for the year, which will easily pay for both machines.  Everything after that is gravy.  Much more valuable than that, however, is the opportunity cost you save by having FE leadership on the floor instead of in the office.  The safe reconciliation takes significantly longer than an individual drawer reconciliation, so that's where the money counter really pays for itself...our shift supervisors are done with that process and out on the floor much faster.  So that's my endorsement...take it or leave it.”

            Several other managers also recommend using a cash counter, such as Sheryl McCoy of Good Foods Co-op (May 16, 2012):

       “Our office clerks (shift leads), or Front End Management acting in that capacity, count the tills through the day & as we close, & then also prepare the deposits in the AMs.  

        “We have a $ counter, a Tellermate specifically, & I highly recommend you invest in one if your size warrants it, because it's a giant time saver.  I can't imagine still trying to count tills by hand, especially the coins.  In my opinion that's one of the best investments this department ever made.”

       Bill Bickford added detail: 

       “Here are the model numbers for our counting machines: Bill counter - Laurel J-710A Change Scale - Klopp KCS-60 - I don't think either of them are particularly high-end, but it's also been a long time since I've looked at them.  The Laurel has been kicking for longer than I would have expected.  The Klopp had to be sent back almost immediately for a bad motherboard, but it's been fine since then.”

            Concerning an armored car service for transporting deposits, this practice is recommended as the store grows.  Commented Francesco Scarlassare of Honest Weight Food Co-op:

       “We have an armored car service.  We did not do this until about 8 or 9 years ago and we have been in business for over 35 years.  We found that there is less liability doing it this way and our employees felt uncomfortable being responsible for the amount of cash they had to handle.  The armored car brings our change orders with them when they come for pickups.  We pay about $750-$850 per month for this service depending on gas prices and holiday pickups.”


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