What is cash closing?

The cash closing or cash count consists of reviewing cash receipts from time to time, whether they are cash, checks or any other form of payment. It is usually performed at the end of the workday, although it can also be done at other times according to the schedule established for this activity. A surprise cash count can even be performed for auditing purposes, in order to detect management failures, negligence and even criminal intentions related to cash handling.

In the following, we will see how to perform a cash closing with the traditional procedure and what measures can be taken to avoid losses as far as possible.

How to do a cash closing: traditional procedure

There is no single procedure for performing a cash closing. It all depends on the type of business we have, sales planning, schedules, available personnel and many other factors.

Therefore, it is best to analyze the traditional procedure. This is the one followed by small retail establishments as well as markets and supermarkets:

1. Start the day with a fixed amount of cash, which as a precaution has to be verified before opening the establishment.
2. At the end of the day, perform the following operations:
   1. Count the bills by sorting them denomination (1000, 500, 100, 100, 50, etc.). The same should be done, patiently, with coins, checks and promissory notes.
   2. Do the sums and, when you have the total, subtract the amount you started the day with. The result should match what appears on the terminal screen.
   3. Classify the money according to the destination and then deposit the different amounts in the established places.

The traditional procedure teaches us how to make a cash closing in a simple and fast way, besides allowing us to easily change the cashier. However, it has the disadvantage that it requires only one person to keep the accounts in order. If several people manipulate the cash register, an unbalance may occur, not to mention the possibility of the manager manipulating the accounts for the purpose of theft.

how to close the cash register without losses?

Many people often wonder how to make a perfect cash closing. To achieve this, we just need to follow some common sense guidelines to help us control the process. Let’s look at some of them:

1. Don’t take money out of the till to settle accounts of any kind, as this contributes to complicating calculations and creating difficulties, especially if more than one person handles the till.
2. Keep a permanent and competent staff to carry out the cash count. If the person in charge changes from time to time, there is a high chance of oversights and even theft.
3. Automate the process using an ERP or enterprise resource planning system. Remember that most accounting errors are caused by human error.
4. Implement the appropriate administrative measures and install security cameras to keep the cash-counting clerks under control.

If we follow the above tips diligently, we can ensure that at least 99% of the cash closings performed in our business are correct.

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