With the advent and rise of card payments, smartphone payments and cryptocurrency, the importance of cash has never been affected. Still, in shops, bars and stores, some people prefer to pay cash. So almost everyone – from large entrepreneurs to daily workers – knows how to handle cash effectively. Generally, the term cash handling is common in the financial service industry, but it has great importance in the retail industry too. Read on to learn more about it!
What is Cash Handling?
To put it simply, it is the simple process of accepting/receiving cash and giving money to others. To handle cash, banks use ATMs and teller transactions. It is a popular method in the retail industry that is easy to set up for making low-cost purchases. In the retail industry, it starts from the point of sales to the cash management in the background.
To handle cash effectively, you need to be aware of the procedures of record-keeping, cash flow management and security. To receive cash, you need to have a float in the till (the minimum amount to do cash transactions). Nowadays, almost all businesses use an electronic system to record cash and issue a receipt to the customers.
The last stage of cash handling before closing the business is to cash up the till. It is the process of counting cash and recording. Then it is compared with the sales recorded within a day. You need to know that there may be errors if everything is done by humans, so it is a better practice to use electronic machines. Your cashier should be skilled enough to accurately deal with the cash that is coming in and going out.
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Elements of Cash Handling
Due to the large scope of the retail industry, this process can be a bit daunting. So, handling cash can be difficult to manage and track every minor detail. Here are the common elements of it:
- Managing Cash Physically: Managing cash physically is how you receive, use and store it and who is responsible to manage and monitor.
- POS System: To manage your cash effectively, you can’t ignore Point of Sale (POS). Here your cashier should be skilled enough to control the cash incomings and outgoings.
- Payment Tracking: Tracking payment is another great element. You need to keep a record of both physical and digital cash transactions, monitor them properly and store them.
- Paper Trail: Whatever receipt, invoice or other documents you have must be accurately processed and filed.
How to Manage the Cash Securely?
There are some steps you need to follow to manage everything safely. Here are a few steps to follow:
- Save your cash in a secure till/cash box
- Don’t keep a large amount of cash (especially high-value notes) in the till
- Look for stained, or fake notes
- Don’t count cash in front of customers
- Withdraw cash from tills on a daily basis
- Deposit your cash regularly in the bank
Common Problems Of Cash Handling in Retail
Here are the three most common issues that are associated with handling cash in the retail industry:
1) Lack of Due Diligence
As a business owner, you need to know how much money is coming in, where it is, who is handling it and where it has been used. By getting all the answers to these questions you could effectively handle cash otherwise there might be bookkeeping and cash flow issues, errors, theft, etc.
2) Lack of Paper Trail
This system ensures that where your cash is and who has got it access. On the flip side, without it, you are unable to handle your cash properly, find mistakes and rectify them. So a discrepancy in a day can be problematic to track everything.
3) Security Issues
Using electronic and digital tools can make the process of handling cash more efficient and effective. With them, you can find out where your money is and with these machines, you will be protected from thefts, fraud and breaches. Without it, your business is more vulnerable to them.
Quick Sum Up
So getting equipped with the ways and steps for proper cash handling is very important for security, efficiency and ease. You have now got a better understanding of the steps, elements and common problems related to handling cash. In addition, you need to analyse your procedures and processes of cash management. The proper handling and management of cash is imperative for a better cash flow and to keep your business afloat.
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Disclaimer: This blog provides basic information on handling cash.