Retail Mefis - what is the best way to handle cash?
April 1, 2014 5:31 AM Subscribe
I am owner of a new retail business (coffee shop, if you see past posts) shortly to launch.
We anticipate handling a fairly large amount of cash each day.
It seems sensible to me that I get staff to do regular banking when I am not at the business.
What is the best way to organise this, bearing in mind:
- I want to minimise staff time away from the business (there are two retail banks in a 1min walk)
- I need to have some controls around honesty
- I need to handle a fair bit of change
- I need to produce a cash register float often
- there will likely be 'end of days' for staff to handle.
I figure there are retail manger Mefis for whom this is simple?
What is the best way to organise this, bearing in mind:
- I want to minimise staff time away from the business (there are two retail banks in a 1min walk)
- I need to have some controls around honesty
- I need to handle a fair bit of change
- I need to produce a cash register float often
- there will likely be 'end of days' for staff to handle.
I figure there are retail manger Mefis for whom this is simple?
When you launch this buisness, you need to make all the cash deposits and you need to be there pretty much all day, every day.
Bank with the bank that's closest to you. Go in and speak to one of the customer service folks, explain your needs and find out what the bank suggests.
I wouldn't trust employees with cash, not until I've known them forever, and even then, only with a background check.
posted by Ruthless Bunny at 5:35 AM on April 1, 2014
Bank with the bank that's closest to you. Go in and speak to one of the customer service folks, explain your needs and find out what the bank suggests.
I wouldn't trust employees with cash, not until I've known them forever, and even then, only with a background check.
posted by Ruthless Bunny at 5:35 AM on April 1, 2014
One, and only one, employee on a cash register. Otherwise you have NO accountability and you WILL lose cash.
That employee counts in his/her drawer at the start of shift and at the end of shift, it's reconciled to the register.
You do the banking, or, if you're an absentee owner (and god knows I don't recommend THAT), you have one trusted manager who does the banking and reports to you.
You have an independent accountant.
and... what Ruthless Bunny said...
posted by HuronBob at 5:38 AM on April 1, 2014 [2 favorites]
That employee counts in his/her drawer at the start of shift and at the end of shift, it's reconciled to the register.
You do the banking, or, if you're an absentee owner (and god knows I don't recommend THAT), you have one trusted manager who does the banking and reports to you.
You have an independent accountant.
and... what Ruthless Bunny said...
posted by HuronBob at 5:38 AM on April 1, 2014 [2 favorites]
Response by poster: Bunny, I think yours is reasonable advice, but the hours we anticipate working are long.
There are many, many businesses that are franchises or otherwise that handle cash in large-ish quantities, so I am interested in any feedback on how they best do it.
posted by bystander at 5:39 AM on April 1, 2014
There are many, many businesses that are franchises or otherwise that handle cash in large-ish quantities, so I am interested in any feedback on how they best do it.
posted by bystander at 5:39 AM on April 1, 2014
You get a fully vetted, bonded employee to do the deposits in your stead. And I'll say it again, when starting a business, the owner needs to be there every minute of every hour that it's open, probably for the first year. This is one of the reasons that most businesses fail in the first year, the owner underestimates his/her employees capacity for dishonesty and is entirely too trusting that the people hired will have as much invested in the success of the business as the owner.
Franchises have managers that are in the business 60+ hours per week. These mangagers are bonded and 100% responsible for cash deposits. In some cases the actual cash is handed to an armed guard for deposit.
Having a cash-heavy business is an invitation to be ripped off by your employees. It just is.
Also, have a discussion with your bank. They have Anti Money Laundering software that flags large numbers of cash deposits and if you don't have a relationship with your banker, you may find your accounts frozen for investigation.
posted by Ruthless Bunny at 6:21 AM on April 1, 2014 [5 favorites]
Franchises have managers that are in the business 60+ hours per week. These mangagers are bonded and 100% responsible for cash deposits. In some cases the actual cash is handed to an armed guard for deposit.
Having a cash-heavy business is an invitation to be ripped off by your employees. It just is.
Also, have a discussion with your bank. They have Anti Money Laundering software that flags large numbers of cash deposits and if you don't have a relationship with your banker, you may find your accounts frozen for investigation.
posted by Ruthless Bunny at 6:21 AM on April 1, 2014 [5 favorites]
I agree with everyone else. Take it from someone who has been on the employee end. I was given way too much leeway in a job I made $8/hr at. Due to a manager's long term illness, I counted the drawer and put it in the safe every night almost right from the start. I didn't steal, but boy would it have been easy. On weeks where I was short on bills or cash, it was also very tempting. I did not care about the success of the business, because I was being paid terribly for the work I was doing.
If you don't have your hands on the bank, you are inviting your employees to become dishonest.
posted by coreywilliam at 6:31 AM on April 1, 2014
If you don't have your hands on the bank, you are inviting your employees to become dishonest.
posted by coreywilliam at 6:31 AM on April 1, 2014
You need to hire someone with retail management experience, preferably as a consultant and not someone who will actually handle money for you. Cash management for retail involves a ton of moving parts and organization. A lot of it depends on what point-of-sale equipment you use, what your bank needs, and what requirements your insurance imposes.
Everything Ruthless Bunny and HuronBob say is solid.
You go to the bank once per day to make a deposit and get change. Change is stored on-site in a safe; excess cash is regularly deposited into a different section of that safe. Everything gets logged. Every employee who works on a register will probably spend ten minutes a shift counting their drawers; yourself or a trusted manager will spend close to an hour a day counting cash and waiting in line at the bank.
You will need to have policies for dealing with checks. You will need to know what to do when your credit card processing system goes down. You will need to have books so detailed that you can tell every time five dollars goes missing, and who is responsible for it.
Franchises have massive manuals dedicated to to cash handling, tailored to the systems they use and the kind of business they get.
posted by catalytics at 6:32 AM on April 1, 2014 [6 favorites]
Everything Ruthless Bunny and HuronBob say is solid.
You go to the bank once per day to make a deposit and get change. Change is stored on-site in a safe; excess cash is regularly deposited into a different section of that safe. Everything gets logged. Every employee who works on a register will probably spend ten minutes a shift counting their drawers; yourself or a trusted manager will spend close to an hour a day counting cash and waiting in line at the bank.
You will need to have policies for dealing with checks. You will need to know what to do when your credit card processing system goes down. You will need to have books so detailed that you can tell every time five dollars goes missing, and who is responsible for it.
Franchises have massive manuals dedicated to to cash handling, tailored to the systems they use and the kind of business they get.
posted by catalytics at 6:32 AM on April 1, 2014 [6 favorites]
I would agree that this needs to be a management thing. Even if you have the employees checking each other, collusion is way too easy, especially if they have time to hang around without you to make plans. Even if it's just a paid manager, seriously, part of the reason managers make more is to keep them loyal enough not to think that skimming is a good plan. The employees who expect they might be gone next week anyway are a very high risk. I don't think you're going to find any long-term successful business that leaves this in the hands of employees they don't know very well beforehand, and unfortunately, I've known several cases personally of small businesses that had serious embezzlement problems from low-level employees who'd been there for years.
posted by Sequence at 6:57 AM on April 1, 2014
posted by Sequence at 6:57 AM on April 1, 2014
A lot of banks will have after-hours deposit drops, so you don't need to make the deposit during business hours. You'll get a handful of deposit pouches from the bank, fill out a deposit slip, stick that, the cash, and any checks in there, and stick it in the slot. Done.
When I worked retail (in a family business), the bank we were dealing with was very persnickety about miscounts on the cash—they charged a fee for all cash deposits, and I think they charged a surcharge if we had our cash count wrong (it's been a long time, my memory is hazy).
I have heard of a coffee shop that simply doesn't handle cash—only credit cards.
posted by adamrice at 7:32 AM on April 1, 2014
When I worked retail (in a family business), the bank we were dealing with was very persnickety about miscounts on the cash—they charged a fee for all cash deposits, and I think they charged a surcharge if we had our cash count wrong (it's been a long time, my memory is hazy).
I have heard of a coffee shop that simply doesn't handle cash—only credit cards.
posted by adamrice at 7:32 AM on April 1, 2014
Best answer: Here's how it worked when I worked as a cashier for a large grocery chain (slightly different, but maybe still helpful):
-register was emptied out and counted every night and compared against the electronic record of cash purchases. You need to allow time for this after closing. Sometimes also counted mid-day/between cashiers if there was time. Ours were given a fixed amount of change at the start of every day, but that's not really necessary as long as you know how much is in there (and have an adequate float)
-the people using each register every day were tracked; any discrepancies over 5$, they made a note of it, and if it happened "too often" for a cashier they'd investigate. I don't know more details since that never happened to me. Knowing we were strictly tracked helped keep us honest.
-the trusted financial person (no-one else!) went around to collect the 20s throughout the day so they didn't build up too much - avoids bills falling out the sides and also good if you're in an area that might ever get robbed. At our store these were counted and then picked up from the safe by a security company, but for a smaller shop you'd want to either lock them somewhere very secure and immovable or just deposit them at the bank immediately. You may need to pick up small bills/coins for change at the same time if you get a lot of larger bills to break and cashiers are running out of change.
-we had security cameras over every till to keep us honest, no idea whether they were actually monitored but just the threat helped a lot, and if they're taped you can go over them later if necessary to see why your records aren't matching up.
Keep in mind that mistakes do happen so don't sweat the occasional 5$ or so but keep track so it doesn't become a pattern, with people taking advantage of you.
Also a discrepancy isn't always cashier theft - people deliberately try to trick cashiers by confusing them. We were trained to keep the money they gave us sitting on the till until after we'd given change, so they couldn't try the very common "I gave you a 20 not a 10$!!!!" strategy, whether deliberately or not (people are dicks and also absent-minded, sometimes even both). This happened probably once a day for me. Related, you should also have a manager or yourself around at all times, so the cashier can pass off the problem rather than being tempted to just give the customer the 5$ they're claiming they're owed just to stop the yelling...
I'd suspect you might have a problem with people skimming drinks/food for themselves (usually this is a legit perk for baristas though) and friends (usually less ok). Up to you how much you want to crack down on this since the coffee is probably not costing you much, and keeping your employees happy is important, but you don't want it to cut into your sales. Again security cameras (or just being around yourself) help a lot in keeping people honest, once you make it clear what the rules are and how strict you are about them.
And this one is harder to achieve, but if your employees like you personally and the working environment is good, they'll be less likely to risk losing that by theft/etc. This very much does not mean be a pushover, though, since that will have the opposite effect. It's a tough balance but rewarding for many people. Good luck!
posted by randomnity at 8:54 AM on April 1, 2014 [3 favorites]
-register was emptied out and counted every night and compared against the electronic record of cash purchases. You need to allow time for this after closing. Sometimes also counted mid-day/between cashiers if there was time. Ours were given a fixed amount of change at the start of every day, but that's not really necessary as long as you know how much is in there (and have an adequate float)
-the people using each register every day were tracked; any discrepancies over 5$, they made a note of it, and if it happened "too often" for a cashier they'd investigate. I don't know more details since that never happened to me. Knowing we were strictly tracked helped keep us honest.
-the trusted financial person (no-one else!) went around to collect the 20s throughout the day so they didn't build up too much - avoids bills falling out the sides and also good if you're in an area that might ever get robbed. At our store these were counted and then picked up from the safe by a security company, but for a smaller shop you'd want to either lock them somewhere very secure and immovable or just deposit them at the bank immediately. You may need to pick up small bills/coins for change at the same time if you get a lot of larger bills to break and cashiers are running out of change.
-we had security cameras over every till to keep us honest, no idea whether they were actually monitored but just the threat helped a lot, and if they're taped you can go over them later if necessary to see why your records aren't matching up.
Keep in mind that mistakes do happen so don't sweat the occasional 5$ or so but keep track so it doesn't become a pattern, with people taking advantage of you.
Also a discrepancy isn't always cashier theft - people deliberately try to trick cashiers by confusing them. We were trained to keep the money they gave us sitting on the till until after we'd given change, so they couldn't try the very common "I gave you a 20 not a 10$!!!!" strategy, whether deliberately or not (people are dicks and also absent-minded, sometimes even both). This happened probably once a day for me. Related, you should also have a manager or yourself around at all times, so the cashier can pass off the problem rather than being tempted to just give the customer the 5$ they're claiming they're owed just to stop the yelling...
I'd suspect you might have a problem with people skimming drinks/food for themselves (usually this is a legit perk for baristas though) and friends (usually less ok). Up to you how much you want to crack down on this since the coffee is probably not costing you much, and keeping your employees happy is important, but you don't want it to cut into your sales. Again security cameras (or just being around yourself) help a lot in keeping people honest, once you make it clear what the rules are and how strict you are about them.
And this one is harder to achieve, but if your employees like you personally and the working environment is good, they'll be less likely to risk losing that by theft/etc. This very much does not mean be a pushover, though, since that will have the opposite effect. It's a tough balance but rewarding for many people. Good luck!
posted by randomnity at 8:54 AM on April 1, 2014 [3 favorites]
When I worked in a newly opened coffee shop, the owner was there every day. Even if just to stop by and see how things were going. My assumption based on the fact that he stopped by every day was that he was probably the one making cash deposits.
Our shop was a second branch related to a long-standing original shop, and all our managers were people who had worked in the first store for years. The owner presumably trusted them to handle cash to a certain extent. Even so, I'm fairly sure that managers were only doing bank runs in certain situations (owner goes on vacation, that sort of thing).
If this is your first shop, it seems optimistic to me that you're expecting to not really be there ever.
posted by Sara C. at 10:18 AM on April 1, 2014
Our shop was a second branch related to a long-standing original shop, and all our managers were people who had worked in the first store for years. The owner presumably trusted them to handle cash to a certain extent. Even so, I'm fairly sure that managers were only doing bank runs in certain situations (owner goes on vacation, that sort of thing).
If this is your first shop, it seems optimistic to me that you're expecting to not really be there ever.
posted by Sara C. at 10:18 AM on April 1, 2014
Best answer: When I worked in retail (in a mall) we did cash drops at the bank that was in the mall. At 17 years old, I was the cash drop person because I was usually the evening supervisor. I was very responsible and never stole money, but do *not* do this. 17 year-olds should not be zipping 20-40 grand into a pouch and walking it anywhere. There was a policy that deposits should be walked by two people, but I didn't always follow it. One of my closing cashiers was an ancient Jewish woman with a number tattooed on her arm, and I wasn't gonna make her walk the full length of the mall after a tiring shift.
Throughout the day we did pulls to keep drawers from getting too full and dropped them in the safe. Pulls were managed using the register software. At the end of each person's shift, we could print a receipt that would tell us how much money we should have in the drawer, and it accounted for pulls because they were entered into the register at the time of the pull. At the end of the night we did drawer counts for the last shift and match our safe money against sales receipts. We had software for this. It would tell us how much money we should have, minus the 100 dollars for change we left in *each* drawer that was also locked in the safe. We had a minimum amount of money that was always left in the safe for change, and that was deducted from the deposit.
Two things to keep in mind, both based on stuff that happened when I worked retail.
1. One night my manager left instructions for me to clean out the inside of the registers after the drawers were pulled using Windex and paper towels. I found about $500. Being relatively bright, I was aware that this money had already been accounted as "short" from who knows how many years of bills getting stuffed from drawers being too full. Were I dishonest, I would have been able to take this money and no one would have been the wiser. I left it in an envelope in the safe and left a note for my manager to read in the morning.
2. During the Christmas season, I was doing pulls literally every 20 minutes or so, on 5-8 registers. At one point I stuffed the pull in my pocket because I had to deal with an irate customer. Completely forgot about it. I wasn't the closing supervisor that day, so I drove home with thousands of dollars in my pocket. It wasn't discovered until closing that night, when my manager did the count. Several cashiers got bitched out because I was distracted. I discovered the money when I went to wash my pants the next day and drove it into work. Strangely, I did not get bitched out. However, two things can be learned from this. First, there should be a way to drop pulls into the safe right from the cashier area. Our safe was behind a locked door and up a flight of stairs, so it was easy to get distracted by customer service while thousands of dollars were in your pocket. Second, the person doing pulls should not also be responsible for doing customer service while they're managing loads of money. Because I had a letter in my file for making a customer wait while I was doing manager-y stuff, I was sensitive to the issue and made a huge mistake.
posted by xyzzy at 1:04 PM on April 1, 2014 [2 favorites]
Throughout the day we did pulls to keep drawers from getting too full and dropped them in the safe. Pulls were managed using the register software. At the end of each person's shift, we could print a receipt that would tell us how much money we should have in the drawer, and it accounted for pulls because they were entered into the register at the time of the pull. At the end of the night we did drawer counts for the last shift and match our safe money against sales receipts. We had software for this. It would tell us how much money we should have, minus the 100 dollars for change we left in *each* drawer that was also locked in the safe. We had a minimum amount of money that was always left in the safe for change, and that was deducted from the deposit.
Two things to keep in mind, both based on stuff that happened when I worked retail.
1. One night my manager left instructions for me to clean out the inside of the registers after the drawers were pulled using Windex and paper towels. I found about $500. Being relatively bright, I was aware that this money had already been accounted as "short" from who knows how many years of bills getting stuffed from drawers being too full. Were I dishonest, I would have been able to take this money and no one would have been the wiser. I left it in an envelope in the safe and left a note for my manager to read in the morning.
2. During the Christmas season, I was doing pulls literally every 20 minutes or so, on 5-8 registers. At one point I stuffed the pull in my pocket because I had to deal with an irate customer. Completely forgot about it. I wasn't the closing supervisor that day, so I drove home with thousands of dollars in my pocket. It wasn't discovered until closing that night, when my manager did the count. Several cashiers got bitched out because I was distracted. I discovered the money when I went to wash my pants the next day and drove it into work. Strangely, I did not get bitched out. However, two things can be learned from this. First, there should be a way to drop pulls into the safe right from the cashier area. Our safe was behind a locked door and up a flight of stairs, so it was easy to get distracted by customer service while thousands of dollars were in your pocket. Second, the person doing pulls should not also be responsible for doing customer service while they're managing loads of money. Because I had a letter in my file for making a customer wait while I was doing manager-y stuff, I was sensitive to the issue and made a huge mistake.
posted by xyzzy at 1:04 PM on April 1, 2014 [2 favorites]
Best answer: I work at a small coffee shop, and this is roughly how it works:
-We have an AM drawer and a PM drawer.
-Opening person comes in, counts the drawer and notes the total (always should be $150) and counts the bank (used for change, always $600). Counts for each bill and coin are written down.
-During shift, uses POS software for cash and credit sales and keeps receipts for credit.
-Mid shift person comes in after an hour or two and uses the same drawer, but each person has a separate sign in to the machine and (in theory) every transaction they run should be under their name.
-Afternoon shift comes in, counts the PM drawer. Drawers are switched and the shift is changed on the POS.
-Mid shift person counts the drawer, adds everything up and takes out all but $150 from the drawer and puts it in a deposit envelope, which gets deposited into a separate compartment in the safe that only the owner can access. They balance the drawer, adding change as necessary from the bank, then count the bank. Before they leave, the afternoon person counts the bank to check it.
-After closing, the afternoon person repeats the close out procedure.
As far as I know, this generally works fairly well- in the 6 months I've worked there, I haven't heard of a discrepancy over $10 happening (except for the occasional miscount that gets cleared up when the drawer/bank is counted by the next person). It helps that there are only about 8 employees, and no more than two working at once, so there's never a long list of people who could be responsible for a mistake. The owner comes by every weekday and adds change to the bank as needed, pulls the deposits and makes sure everything is OK. There's also a co-owner who does the books, and she has proven herself able to track down any small discrepancies that occur. Knowing that you'll be getting an email if you, say, misrang a cash purchase as a gift card purchase means it's easier to be honest. It also might help that the owner is ex-military and has a camera over the till that he definitely uses. We also get good tips, which means that you're always leaving with a handful of cash, and we get paid wages weekly- I think it reduces the temptation to skim.
posted by MadamM at 1:36 PM on April 1, 2014 [5 favorites]
-We have an AM drawer and a PM drawer.
-Opening person comes in, counts the drawer and notes the total (always should be $150) and counts the bank (used for change, always $600). Counts for each bill and coin are written down.
-During shift, uses POS software for cash and credit sales and keeps receipts for credit.
-Mid shift person comes in after an hour or two and uses the same drawer, but each person has a separate sign in to the machine and (in theory) every transaction they run should be under their name.
-Afternoon shift comes in, counts the PM drawer. Drawers are switched and the shift is changed on the POS.
-Mid shift person counts the drawer, adds everything up and takes out all but $150 from the drawer and puts it in a deposit envelope, which gets deposited into a separate compartment in the safe that only the owner can access. They balance the drawer, adding change as necessary from the bank, then count the bank. Before they leave, the afternoon person counts the bank to check it.
-After closing, the afternoon person repeats the close out procedure.
As far as I know, this generally works fairly well- in the 6 months I've worked there, I haven't heard of a discrepancy over $10 happening (except for the occasional miscount that gets cleared up when the drawer/bank is counted by the next person). It helps that there are only about 8 employees, and no more than two working at once, so there's never a long list of people who could be responsible for a mistake. The owner comes by every weekday and adds change to the bank as needed, pulls the deposits and makes sure everything is OK. There's also a co-owner who does the books, and she has proven herself able to track down any small discrepancies that occur. Knowing that you'll be getting an email if you, say, misrang a cash purchase as a gift card purchase means it's easier to be honest. It also might help that the owner is ex-military and has a camera over the till that he definitely uses. We also get good tips, which means that you're always leaving with a handful of cash, and we get paid wages weekly- I think it reduces the temptation to skim.
posted by MadamM at 1:36 PM on April 1, 2014 [5 favorites]
Cameras on the cashier. Where I work, the owner has some sort of app on his phone so that he can watch what's going on no matter where he is. I imagine that helps to keep the cashiers honest.
posted by MexicanYenta at 7:30 PM on April 1, 2014
posted by MexicanYenta at 7:30 PM on April 1, 2014
Response by poster: Thanks to all.
I am not seeking to abrogate responsibility, but the shop is open 100 hours a week, so there will be times when I am not available, and I want to have systems in place to deal with that.
I don't want a circumstance cash is left unbanked if I am ill or something unexpected happens, so I have 'best answered' those that gave good systems examples.
posted by bystander at 12:05 AM on April 2, 2014
I am not seeking to abrogate responsibility, but the shop is open 100 hours a week, so there will be times when I am not available, and I want to have systems in place to deal with that.
I don't want a circumstance cash is left unbanked if I am ill or something unexpected happens, so I have 'best answered' those that gave good systems examples.
posted by bystander at 12:05 AM on April 2, 2014
This thread is closed to new comments.
posted by bystander at 5:31 AM on April 1, 2014