A restaurant cash register drawer used to be the most essential provision of every restaurant. The ability of today’s modern POS to do just about anything is quite impressive. Keeping track of all the restaurant’s cash remains crucial to the process.
To facilitate safeguards and prevent mishandling, internal processes are important.
As an essential process, it must be reliable and create a conducive environment to facilitate efficient operations, while also ensuring the integrity of accounting records. Mishandling of cash is not only costly to the business, but it is one of the most significant reasons for loss of sales.
A faulty control procedure makes theft possible, the second common cause for loss of sales.
An important function of cash registers is to count and reconcile money, reconcile receipts, and balance the drawer which accounts for all transactions on a given day. The most modern POS systems even provide an employee guideline for balancing the cash register.
It is quite common for store policies to be crafted to facilitate the process of cash management. Cashiers must make sure everything balances, or else things can quickly spiral downwards.
Learning how your profitability relies on your cash registers, you might be thinking that you have to hire a professional for the job. While that’s the most ideal option, as a restaurant owner, you must have basic finance and accounting knowledge.
In this article, you will learn the basics of cash balancing. By reading the article through, you will be equipped with the information you need for the foundation of your accounting and financing.
Balance the Cash Register Drawer in Your Restaurant
Cash registers and drawers that are balanced correctly and regularly will always contain enough money in them to keep your employees from being disrupted or negatively affected during their shifts.
It is important that at the end of every shift, they are balanced to ensure profitability. As a minimum, ensure you balance your cash at the end of each day if balancing it too often is not feasible.
Importance of Balancing Your Cash Register
When you own a restaurant, you need to ensure that you have a steady cash flow, and that includes credit cards and checks. Businesses dealing with cash transactions need to have robust cash-handling procedures in place, even when you believe that your team will handle the cash appropriately.
Balanced cash registers not only provide stability to your cashier but also provide a clearer picture of how the money flows in. As a monitoring system, the cash register can detect the movement of money, and if any money suddenly disappears, either it is the result of theft, or it is an error in judgment.
In addition, mobile payments like Google Pay are increasing in popularity and need to be included in the accounting and pricing model. You can keep your business on track financially by keeping track of your register and accounting for all profits.
Further, any employee can pull up an entire sales report in an instant throughout the shift. A properly documented register and drawer avoids administrative errors and corruption, so it works to the benefit of the business
Accurate and comprehensive information about the cash flow is crucial for success. The safety of the register is ensured by not keeping money in it for long periods. As a precaution against theft or burglary, a minimum amount is kept. Keep relatively small amounts of cash on the floor as this is a risk.
Business owners such as you and your staff are protected by these practices because everyone is responsible for what goes into and out of the register.
When You Should Balance Your Restaurant Cash Register
After each shift, you should ensure your restaurant register and drawer is balanced. Even though it’s not a hard-and-fast rule, and some businesses may only do it occasionally, a daily check is recommended for various reasons. A key benefit of this is that if a calculation doesn’t add up, you can more easily fix it.
Having to find and rectify any error that occurred a week ago is labor-intensive and time-consuming because you have to include every missed day and check it individually. Keeping track of discrepancies daily significantly reduces their impact.
How To Balance The Cash Register of Your Restaurant – Tips
The process of accurately accounting for each day’s monetary transactions is known as cash register balancing. Balanced registers are the foundation of effective accounting and bookkeeping. It is common for credible employees to operate the cash registers and to achieve high levels of efficiency.
Upon completion of their shift, you should prepare the drawer for the next employee to use or will prepare a bank deposit to depart your office. To properly balance a cash register, there are just a few easy steps that must be followed.
Fortunately, there are numerous workable and useful cash balancing tips you can learn so that the process is more exciting and easier for you and your team.
Establish the ideal amount to start with
Make sure that your registers are always well stocked with bills and coins so you can make changes for consumers. It is possible, however, for an excessive amount of cash to remain in it at one time, posing a potential threat to theft and putting you and your wait staff at risk.
A packed drawer can also cause bills to fall out of registers, or slip behind them. The bottom line of your business is affected by both situations, irrespective of intentions. When your sales are being compromised, determining profitability isn’t possible.
Make sure that you keep a certain amount of cash in the register throughout the first half of the shift to handle standard payments and transactions. Before loading and after removing the drawer, choose an easily countable number. These numbers generally range from $50 to $200.
Fix a time when cash drops will take place
Managers and supervisors manually remove and deposit cash into a drawer to ensure customer transactions are completed on time. These cash drops typically occur towards the end of the meal rush, for an instance lunch break, depending on the volume and frequency of cash payments.
Ensure that a standard amount is maintained for each cash drop, as well as noting the individual who deposited the cash. Attempt to have the cashier verify and authorize the transaction. Since they’ll be the ones who’ll need to deal with the balance, this is most important.
There should be one staff to each register
Make sure that a single person will be in charge of the register for the entire duration of a shift or meal. Make sure that each employee is assigned to a separate register if multiple registers are needed.
A clear understanding of job responsibilities and areas of work will make your dining operation more efficient. Multiple employees accessing one drawer quickly can result in a risk of accounting errors, and bills can get lost.
The same employee must balance their drawers
Make drawer counting assignments when arranging your restaurant staff schedule. If it is possible, ask the same team member to count a drawer with a supervisor nearby at the end of the shift.
The final amount is therefore unlikely to be off by much. It is usually a human error that causes small overages or shortages. Any differences that are usually more significant will require the supervisor or you, the owner, to take disciplinary action.
Set aside income from the start-up amount, and store immediately
Ensure that tip pooling and tip sharing are properly accounted for and recorded if your staff is participating. If you intend to deposit your earnings at the bank, place the sealed envelope in a safe along with the cash register drawers.
Owners and supervisors must be the only people able to open the safe, which must be isolated for maximum security. It is also a good idea to combine door alarms with security cameras.
Ensure you have the latest cash register software
When a restaurant is in a high-speed environment, or when more than one register is being used at one time, digital cash registers for restaurants are extensively used. Using outdated software in your business will only lead to problems.
Make sure your cash register software is up to the task of reaching your business’ full potential. You can choose from a large variety of software options, some of which can be customized to meet your needs.
How To Balance The Cash Register of Your Restaurant – Steps
Daily balancing of your register will prevent you from losing track of your sales reports and keep you organized. Any discrepancies will be caught immediately and the cause will be able to be pinpointed.
You can trust your team to follow these basic steps when it comes to balancing your cash registers.
- Prepare a POS report
The first thing employees need to do is generate a point-of-sale report on their software that tells how much money they should have in their assigned cash drawer. In the report, the funds will be broken down by payment method, from cash to checks to mobile payments and online payments.
- Count and calculate the cash
Now that the report has been completed, it is time to count the drawer’s contents. To calculate totals, staff should begin by adding up their cash, checks, online, and mobile payments.
If your restaurant is considered cash-intensive, you should consider investing in a counting machine to streamline its processes.
The starting cash balance must be deducted from the current cash balance following the total calculation. To ensure that they have enough change, many employees start their shift by placing $100 at the register.
A cross-count is conducted to confirm that the POS report totals and manual counts correspond.
- Identify the discrepancies and fix them
During manual counts, staff should first review their counts because many discrepancies are caused by errors that have been made by employees, such as having miscounted, miscalculated, and misplaced a credit card receipt.
Employees should determine the type of discrepancy they’re facing if, after recounting the values, there are still differences. Cash drawer discrepancies fall into two categories:
- There is an overage when the amount of cash in the drawer is greater than the POS report amount.
- When the actual cash in the drawer is less than the reported amount, there is a shortage.
The reason for shortages are more serious, is because they could indicate lost or stolen cash, whereas overages are usually due to shortchanging the customer. With serious shortages, there may be circumstances where a closer look at who has been working the drawer during the shift is required.
- Document each transaction
A separate column should be added to the income statement for any discrepancies that cannot be reconciled. In addition to the starting balance and cash sales, employees should record credit card sales, as well as checks, and mobile payments.
Beginning and Ending Cash Balances
The drawer must always have a beginning and an end balance. It is important to have a nice balance of cash on hand as change for customers at the beginning and the end of the day.
About $50 to $200 will usually be sufficient in the drawer. If you operate a seasonal business, you can keep a higher balance during the busy season, and then lower it again during the slow seasons.
Beginning of the Shift
Cashiers should start their day by reviewing the ending draw of last night. In line with the earlier statement, it is a set amount every day. Following validation of the amount, anyone operating a POS can open the register.
End of the Shift
Determine the exact amount of cash by looking at the tender type. Take out the remaining cash and count it. Go back and count the cash again if it is not the same on the POS report.
An over or short represents the remaining discrepancies. There may have been circumstances in which you overpaid or underpaid, short-changed a customer. As long as this doesn’t happen, there’s no need to panic.
You should record that there was overage or shortfall in the deposit so your bookkeeper won’t be looking for it.
Once you have identified the discrepancies, write the amount on a deposit slip, and then place it in an envelope. This envelope should be placed in a deposit bag. Modern POS systems should not require any additional steps unless your bookkeeper is an old-fashioned old-timer.
Common Challenges in Cash Balancing – FAQs
When tipping is not possible due to insufficient cash?
The use of credit cards by consumers over cash has become a major concern over the last couple of years. For instance, you might find yourself with $100 in cash at the register and $300 worth of tips from your staff.
When this occurs, you should write an informal acknowledgment of debt and keep them safe at operational balances while being able to fully pay for tips.
What is the role of an office safe?
The office safe is an absolute necessity if your restaurant business handles a lot of cash. You need to limit how much cash you keep in the drawer. Upon reaching a certain amount of cash, you must place the excess in the safe.
Many factors contribute to this, but theft is the most obvious one. Your average fireproof safe will cost you between $200 and $500, and you can write it off as a tax deduction.
When there are cash missing?
While it’s probably every owner’s biggest nightmare, it doesn’t mean it’s unsolvable. Usually, it’s just a matter of verifying the POS parameters and carefully reviewing the credit card tips.
Whenever you face a situation like this, do not hesitate to contact your point of sale support and ask for assistance.
How should notes be placed in a cash drawer?
The notes should be placed facing in the same direction during the physical count to keep the note amount in the same location.
How do X and Z reads differ?
Modern point of sale systems supports both X and Z reads at the same time, although an X read indicates what you will find, while a Z read resets the till report.
Is the POS accurate in balancing cash?
The answer is yes. A modern restaurant POS system will provide you with an accurate X-Y read, and many will have auditing capabilities for users, where each transaction is date- and time-stamped against the operative involved.
What is the appropriate number of cash drops?
The decision is entirely up to you, but you should keep in mind that the most important thing is to maintain your starting balance and keep plenty of cash in the register to serve customers.
Cash register balancing is a perfect example of a time-honored hospitality ritual that all businesses operating in the sector should adhere to as closely as possible.
Hopefully, this article will become your go-to guide for balancing cash registers. If your staff wants to get on the same page, why not share it with them?
source https://www.etakeawaymax.co.uk/how-to-balance-a-cash-register-drawer/
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