The Right Way to Count Cash. (There is a Wrong Way)
If you’ve set up shop somewhere, you’re likely to have at least a cash till and a method of accepting credit cards. Great! Take money any way you can get it, right? But it’s also important to have a system in place to be able to reconcile what you should have with what you actually have, and how it clears the bank.
First thing’s first – whether it’s a fancy POS system, or a hand-written notebook page at a farmer’s market, you should have some method of tracking your sales as you go. Without this, you’re relying on the assumption that whatever you deposited was what you sold. And you know what they say about assuming…
So let’s start with a perfect scenario: You’ve tracked your sales, and the report says you sold $500 today. Now you want to make sure that’s what you count in your drawer.
Make a list totaling up each method of payment. Here’s an example of this $500 day in QB:
Total Deposit: $500
Record each deposit separately. Remember, cash and credit cards don’t clear the bank on the same day, so entering one $500 deposit would not work.
Now let’s take the same example, but instead, you only have $325 in cash. This is because you used $25 of the cash to purchase supplies at the same market where you are selling.
Supplies: ($ 25)
Total Deposit: $475
Notice cash/checks is still listed as $350 (and total sales is still $500). Just because you put $25 less in the bank doesn’t mean you made $25 less sales.
This procedure is how you reconcile a cash drawer, and it should be done every time you make a deposit. Any number of things can happen between the time you make a sale and the time you make a deposit. Performing this reconciliation is how you capture and record everything properly.
Don’t short-change yourself – you work hard, make sure it shows!