The rise of cashless transactions is inevitable. With that said, it’s been observed that the majority of sales in the US happens in cash. Businesses need to handle both cash transactions and digital payments. Companies need to be extremely careful when it comes to financial transactions to protect themselves from errors and theft.
Managing your finances effectively can help you smoothly operate and grow your business. And to avoid a waste of money and time, you need to have an effective cash handling system. Many small businesses still use traditional cash handling methods, which make cases of cash loss go undetected.
Ways To Effectively Handle Cash To Your Customers
There are both effective and ineffective ways to handle cash to your customers.
In this article, we’ve detailed some practical and efficient ways to manage your business cash.
1. Set A Standard Cash Handling Policy
Your business will be better off with a standard cash handling policy. Let your employees know about your cash handling rules. For instance, you can make rules, such as:
- Deposit the extra cash in the Point of Sale (POS) safe if the money is above the standard amount set by the company.
- Only authorized staff should’ve access to the drawer.
- Lock cash drawers when it’s not in use.
- Maintain a cash sheet and record cash movement throughout the day.
- Make staff signature compulsory to authorize cash transactions.
2. Perform Background Checks
Perform a background check before employing a person. Get their resume, personal information, history of conviction, and previous cash handling experiences. A background check can minimize the chances of fraud.
3. Automate Cash Counting If Applicable
If you’re a business dealing with lots of cash, you should seriously consider having a cash handling machine. These machines have 100% accuracy and can show results on both PC and paper. Banks and other financial institutions use these machines for faster cash processing. Along with cash handling machines, this cash management software for banks helps in effectively distributing cash in today’s cashless economy.
4. Invest In Cash Technology
You can use cash management technology for tracking transactions and scheduling pickup. The software like Perativ is one of the solutions that help banks and financial institutions effectively distribute cash and decrease the cost of cash handling.
5. Use Accounting Software
You’ll only know what’s happening in your business if you’re aware of your financial statements. With accounting software like QuickBooks, FreshBooks, etc., you can record and manage your financial accounts in real-time.
These pieces of accounting software have several useful features. You can create invoices using this software, generate financial statements, rectify basic accounting errors, and more. If you don’t have time to manage your accounting, you can consider hiring a bookkeeper.
6. Create Accountability
Your cash will revolve around a lot when you’re in business. It has to go through various stages via different staff. By creating accountability for losses, your employees will carefully ensure they manage their work in a specific scene.
It’d be best if you made the staff and employees take cash handling seriously. Ask the employees to verify the amount when passing on the transaction to the next person with their signature. It makes them to be careful when they find themselves being responsible for their action. And consequently, make them check for minor errors before they put down their signature.
7. Offer Cashless Payment Options
There’s no difficulty in offering cashless payment options to your customers. If you provide them with enough digital payment options, they will be happy to make the payment using it. And the great thing about digital payment options is that your transactions will be in their record, the very moment your customers transfer the money.
Some of the standard digital payment options you should provide to your customers are digital wallets (PayPal, Payoneer, etc.), mobile wallets (iPay, Apple Pay), online banking, credit cards, gift cards, etc.
8. Avoid Slush Cash Fund
Having a slush fund might sound like a great option to fill the cash shortage. When there’s a cash shortage, the companies expect employees to fill the gap from their pockets. It leads to the creation of a slush cash fund. Staff uses slush cash fund to make up the difference, and they add the surplus amount to the fund.
However, the slush cash fund is only a short-term solution. Instead of the slush fund, you can distinguish between the company fund and ‘unclaimed money.’ It helps you find out the mistakes and errors in the process.
Handling cash can be less challenging if you’ve proper strategies, policies, and technologies in place. It helps you save time and money, and you don’t have to deal with employees with cash handling issues a lot.
By implementing the right cash handling techniques, you can detect frauds and can handle your finance and taxation smoothly.