Managing finances seems like a pretty straightforward thing, but it’s not as easy as it sounds. In fact, there is a bunch of different elements a manager needs to account for before concluding a shift and submitting a daily report. If you’re struggling to figure out how to balance a cash register, don’t worry, we have a couple of tips and tricks to share with you in order to make it a bit easier to comprehend.
It’s important to point out that every restaurant has a slightly different way of doing things including the balancing of their cash drawer, so keep in mind that the points we’ve made can and will differ, depending on the restaurant. However, it’s still a good thing to have a general idea of how to balance a cash drawer properly.
Cash Drawer – the Basics
‘Balancing a cash drawer’ refers to accounting for all incoming transactions that were processed during the shift. However, that doesn’t only include cash transactions, but also credit cards, and tips. As a manager, you have to make sure that the tips have been distributed equally, and on top of that – you have to make sure that there isn’t any money missing in the cash register.
Contrary to popular belief, finding extra money in the cash drawer is a burden rather than a blessing because it indicates that an error has been made during the balancing and requires a complete rerun.
How Often Should One Balance the Cash Drawer?
It is highly recommended that you balance a cash drawer after every shift. It is not a hard-written rule by any means, and some businesses will do it less often, but a daily checkup is strongly recommended, due to several reasons. The most important reason for it is the fact that you can make corrections more easily if something doesn’t add up.
Correcting something that has happened a week ago is much more complex and tedious because you have to include and check every skipped day, individually, to find the error. Balancing on a daily basis greatly reduces the hassle of tracking down particular discrepancies.
How Does One Balance a Cash Drawer?
While it entirely depends on the way your POS is configured, balancing shouldn’t be a complex task. In case your POS is configured like the vast majority of others, it should have all the necessary information you need to close the shift properly.
Once you get the POS report, you should:
- Add up cash that was taken during the shift
- Subtract credit card transactions as well as tips
- Subtract cash refunds
- The amount that’s left should be deposited at the end of the shift
Note: You could run into some discrepancies in case you have different tipping policies or have staff that handles cash exclusively. However, the most frequently used formula for balancing is:
Cash that was taken in – credit card tips – refunds = deposit
As we’ve mentioned, your mileage may vary depending on the business policies.
Troubleshooting and FAQ
Not Enough Cash to Pay Tips
This has become a real problem in the last couple of years as more and more people use credit cards instead of paying with cash. For example, you could run into an issue where you have (for example) a $100 in cash in the register, but your staff’s tips equal $200.
In this case, you should write an informal document acknowledging debt (IOU) and thus keep the safe at operating balances while also being able to pay for tips fully.
Even though this is probably a manager’s worst nightmare, it doesn’t mean it’s an insurmountable obstacle. More often than not, it’s a matter of going through credit cards tips thoroughly or checking the POS parameters to ensure everything is set up correctly. In case you don’t know how to deal with this predicament, don’t hesitate to call your POS support number and ask for help.
If you’re interested in finding more about similar subjects, don’t hesitate to check out some of our other articles! And if you need a way of identifying your avenues of revenue loss, check out what Glimpse offers.