A restaurant’s daily cash sheet is a daily audit of all of the cash taken in and paid out. In many restaurants, there are a lot of people who handle cash at any one time, so it is important to keep track of where it is going.
Having a log of the cash going in and out will give you something to compare the register tally to, as well as help you uncover if there are any shortages or overages at the end of the day. Some large restaurants do a cash sheet before the start of each separate shift.
Download a spreadsheet available online designed for daily cash audits, or create your own in a computer spreadsheet or word processing program.
Make a space for the date at the top, and for the person who was in charge of the shift, be it an owner, manager or other supervisor.
Create a space for the amount of cash that you started out with at the beginning of the shift.
Create a space for each place cash is handled or held. If you only have cash in the register drawer, then just write “Drawer;” however,
if there is more than one cash register, give each a number. Make a space for any funds in the safe or in a change machine as well.
Make a blank for funds given to you by check as well as funds received by credit card. Create a separate space for funds distributed, even if it’s a small amount.
Write each denomination down for your change fund, from pennies through $100 bills.
Organize the information in a way that is simple for everyone handling the sheet to understand.
Print off the sheet and make copies so that one is available at the beginning of each shift.
How to Break Down Change for a Cash Drawer
Destiny joy MBAUpdated January 2020
Most businesses have a cash drawer. If you run a retail business, you’ll need a cash drawer in order to provide customers with exact change when they pay by cash.
If you run a non-retail business, it’s still a good idea to have a drawer of petty cash on hand at all times. A cash drawer is a simple, lockable box with slots for dollars and coins.
A cash drawer should have the correct amount of slots for each denomination of coin and currency with four slots to include $1, $5, $10 and $20 bills, and four smaller slots to include pennies, nickels, dimes and quarters.
Cash Drawer Breakdown
The typical amount stored in a petty cash box is $100. If you run a retail store, consider keeping up to $200 in your cash box on a daily basis. Although physical cash is used less and less these days, you don’t want to be caught without the means to provide change to a customer. If you find that your cash drawer is often running empty by day’s end, consider increasing the amount you keep in the drawer.
If you have decided that $200 works well for your business, make sure you have an evenly split amount of bills and a substantial amount of change as well. Twenty dollar bills and one-dollar bills are the most commonly used, so make sure you have a lot of each on hand in your cash drawer. You should also keep five-and-10-dollar bills and an even distribution of coins, even those pesky pennies.
Determine Maximum Cash Amount
Once you have determined how much cash you need to start with on a daily basis, determine a maximum amount that can be in the drawer at one time. Pulling excess money from the cash drawer during a shift is good cash management and is often called a “cash drop.” During busy retail seasons, you don’t want the drawer to become too full. This will create the temptation for theft and put you at greater risk of robbery.
Balancing Your Cash Drawer
At the end of each business day, remove the initial amount placed in your cash drawer and add up the rest of the money. This will tell you how much the business made in cash that day. A daily balancing of the cash drawer helps deter internal theft.
Where Should the Extra Cash Go?
Most businesses make a daily deposit at their bank. However, if you close late at night, it’s smart to store any excess cash in a safe then make a deposit during daylight hours. To this end, it’s a good idea to have a small safe at your business in addition to your locked cash box. This will ensure that your earnings stay secure.
How to Fill Out a Business Deposit Slip
Lovelyn BaileyUpdated January 2020
While a cashless society might be the futurists’ ideal scenario, retail business owners know there are plenty of people who still use money and checks to make their daily purchases. If you have any type of store or restaurant, it’s likely that you have a pile of checks and cash to deal with at the end of every business day. Your bank or financial institution will want you to fill out business deposit slips to go with all your deposits. This provides a record that safeguards both you and the bank in case of accounting errors.
Best Practices for Cash Handling
Unless you are an owner-operator with no employees, it’s crucial that you practice dual custody when it comes to all cash-handling procedures. This means that whenever you are counting out money for its final destination (or to hand it over to someone else, as in a cash drawer), you should always include two people to count and verify totals with each other.
Once you have the money counted and the cash deposit slip filled out, place it in a deposit bag and lock it. Never leave loose cash in a desk drawer or other hiding place without recounting the entire amount. Once you’ve locked the bag, check the lock to make sure it can’t be forced open. This will ensure that the amount of money you counted is the same amount of money that will arrive at the bank when you make the deposit.
Use the Right Business Deposit Slips
Almost all banks and financial institutions will provide preprinted business deposit slips for your business. Most of them will charge for this service, so you may want to shop around online to see if you can order less-expensive versions by email. Whatever the source, deposit slips should include your business name and address and your bank’s information, as well as your account number and bank routing number.
Completing Business Deposit Slips
Fill out the blank lines on the slip that are provided for cash and checks. Begin with cash, which will be indicated on the top line. Write the total, including dollars and cents. Double check to make sure you have the correct amount written on the slip.
Listing checks on a deposit slip can be tedious, especially if your business takes in large numbers of them each day, but it’s important for you to enter each individual check. Your deposit slip will have a small number of lines on the front for entering checks along with a larger number of lines on the back of the slip. Enter checks on the front of the slip until you run out of spaces and then continue by using the back.
Below the final space for checks on the front is a spot for the check deposit subtotal. Add up the amount of all the checks you are depositing that day and enter that total in this space. Add this subtotal to the amount of cash in your deposit and place this final total at the bottom of the deposit slip in the space indicated for it.
Once you have the entire deposit slip filled out, sign your business deposit record book and have the person verifying your counts sign or initial it as well. Sign or stamp the back of all checks to endorse them. Place the deposit slip along with the endorsed checks and the cash into a deposit bag and lock it, placing it in a secure spot until you can make the deposit.
Cash Segregation of Duties
By: teddy MitchellUpdated September 22 2020
Cash segregation of duties is a tactic to reduce the risk of accidental and intentional money loss by employees. The person most likely to steal cash from a company is a long-term employee in a work environment that lacks segregation of duties. Cash segregation of duties is most common in larger corporations, but small businesses also can benefit from minimal segregation of duties or having a manager thoroughly oversee and review the cash duties. Proper segregation of duties in a cash business requires authorization, custody, recording and reconciliation.
Authorization
Authorization is the first step in the chain of custody. Only one person is authorized to perform a duty. For example, a person can receive mail and checks, but he should not retain the checks in his custody, record them or reconcile the ledger on which the checks were entered. Additionally, he can authorize or prepare deposits, but he cannot go to the bank to deposit the money. Sometimes, in a smaller business, the person who authorizes a check can reconcile it only if another employee or manager deposited and recorded it.
Custody
The length of custody depends on the duty. For example, a cashier handling money for an eight-hour shift in most cases should not reconcile her own cash drawer. It would be acceptable for her to count and record her end-of-day totals, but a superior should reconcile the totals to verify the cash against receipts. This ensures that all money is accounted for and none is missing.
Recording
Recording is the cash duty that requires a manager or employee to physically or electronically record a cash total on the company’s accounting books. This cash duty ensures a paper trail that follows the money. In our previous example, the manager who reconciled the cash drawer should get another manager to record the cash for deposit or cash on hand. When multiple people are handling cash, it is essential to segregate duties throughout the chain of custody.
Reconciliation
Reconciliation is the final step in the segregation of cash duties and chain of custody. It ensures that everyone who handled the money accounted for the cash, checks or deposits correctly. When a manager or employee reconciles the cash totals for the day or week, it provides an opportunity for the business to catch any errors in accounting or discover potential internal theft. The business should always have a different person reconcile than the one who received, handled or recorded the money.
How to Calculate Cash Amounts for an Unadjusted Trial Balance
By: Juliana StallUpdated January 22, 2020
A trial balance is a financial statement that a business prepares at the end of an accounting period, just before making adjusting entries. An unadjusted trial balance is created first and used to make adjusted entries, close the books and prepare the final versions of the financial statements. The unadjusted trial balance is created by transferring the accounts and amounts from the business’s general ledger to the worksheet. The cash account is commonly affected by several transactions.
Open the general ledger. This should be a spreadsheet or accounting software document that tracks all accounting transactions for all of the accounts a business uses. If a business uses the cash account for collecting payments, making payments and making purchases, there will be high number of debit and credit amounts involving the cash account in the general ledger.
Prepare a T-account to calculate the balance of the cash account. A T-account is a T-shaped table composed of two columns. Label the top of the T with “debit” on the far left side and “credit” on the far right side. Write “Cash” at the very top to specify that this T-account is for cash transactions only.
Start at the beginning of the period for the general ledger and review all of the business’s transactions where the cash account has been used. For every debit entry of the cash account on the general ledger, record that amount in the debit column on the T-account. Do the same for every credit entry, recording these in the credit column on the T-account.
Add the debit amounts in the T-account and total them. Do the same for the credit amounts in the other column, then subtract the total credit amount from the total debit amount. This will bring you to your total cash balance, which will be a debit balance if it is a positive figure or a credit balance if it is a negative figure. Ensure that you included and recorded every single cash transaction and did the math properly to avoid any inaccuracies.
Open a new spreadsheet or trial balance document. It should be labeled with the company name and date, and be titled “Trial Balance.”
List all of the business’s account names on the far left side of the spreadsheet. Look at the general ledger and list the most-liquid assets, most-liquid liabilities, equities, revenues and expenses in sequential order. Generally, the cash account is listed first because it is the most liquid asset.
Best Practices for Handling Cash
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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.
Cash Accountability
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.
Duty Separation
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.
Cash Reconciliation
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.
Security
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.
How to Organize a Cash Register Drawer
Ozgur Coskun/iStock/GettyImagesBy: Tracy AltUpdated January 25, 2019
There are many situations in which you might find yourself responsible for handling money. Perhaps you work in a business that requires you to run a cash register. Perhaps you are involved in a fundraiser and have been put in charge of collecting donations. Whatever the situation, it is important to keep your cash register drawer organized. It will make it easier for you to make change and to count the money for accounting purposes, and it will help ensure your register balances at the end of the day.
Sort the bills by denomination. Arrange each stack of bills so they all face the same direction, with the front of each bill facing up.
Place the stack of 1s in the slot of the cash drawer furthest to the left. Place 5s in the next slot, 10s in the next and 20s in the slot furthest to the right.
Place any bills larger than a 20 and all checks received in the compartment beneath the cash drawer.
Use paper clips or rubber bands to store bills in larger groups. Group 1s and 5s in sets of $25. Group 10s and 20s in sets of $100. Store the clipped sets in the compartment under the cash drawer.
Separate coins by denomination and place each pile in a separate section of the cash drawer. Start with pennies on the far left, nickels next, then dimes and finally quarters on the far right.
Use coin rolls to contain excess coins. Store the coin rolls in the compartment underneath the drawer.
Open only one coin roll at a time to make it easier to count the coins at the end of the day.
IRS Petty Cash Rules
By: blessing MohrUpdat january 2020
A petty cash system helps businesses pay small expenses quickly without recording each transaction. It is a separate fund of cash that is set aside to pay for supplies or other low-dollar expenses. To control the petty cash fund properly and record it correctly for tax purposes, the fund should be stored in a secure location and reconciled frequently.
Petty Cash System
While some retail businesses run small expenses out of their tills, a proper petty cash system means setting aside a fixed amount of money in a box or drawer and using it to pay for small expenses. The receipts for the expenses go into the box along with any change from the transactions. The total of the receipts and the remaining cash should always equal the amount you started with. For example, if you have a $100 petty cash fund and spend $27.52 on office supplies, your receipt for the purchase plus the remaining money in the fund will add up to $100.
Receipts
The IRS requires receipts for all expenses over $75, but it is a good habit to get receipts for every petty cash transaction, no matter how small. The receipts will provide the backup to the petty cash replenishment checks when you need to top up the fund. When petty cash gets low, always check the balance with receipts before adding more. To replenish the fund, write a company check to “Petty Cash,” cash it and add the money to the box. The receipts and petty cash reconciliation sheet go to the bookkeeper for entry into the accounting system.
Reporting
The petty cash reconciliation sheet and receipts are the backup for the petty cash replenishment check. Enter them as one transaction in the banking register and allocate sub-totals to each category. For example, if the receipts add up to $97.12 and represent $29.88 in office supplies, $43.02 in maintenance and $24.22 in promotion, the transaction debits Bank $97.12 and credits Office Supplies $29.88, Maintenance $43.02 and Promotion $24.22.
Keeping Records
Like any other business expense, the IRS requires that you keep receipts and other back up for seven years. Attach the receipts to the back of the petty cash reconciliation sheet and file when entered. Store your receipts out of bright light. Some receipts printed on thermal paper will fade long before the requirement for storage is met.
