By Andy Margison

Most small businesses deal with cash on a daily basis, in fact consumers still pay by cash for 52% of their transactions (Source: Payment Council). It is estimated that employee theft occurs in a staggering 64% of small businesses! To make matters worse the majority of cases go unpunished. This is because they either go undetected or cash handling practises lack accountability. Furthermore, most small business use old and inefficient cash handling practises which lack automation. There are right and wrong ways to deal with cash. Good cash handling practises can reduce cash loss, ensure accountability and save time. Here are 5 simple tips to get your cash handling on track:

Tip #1: Set a simple and effective cash handling policy

A cash handling policy is a set of rules that employees have to follow. It’s a good idea to create ‘print outs’ of the policy and place them around the till and back office to remind employees. A typical cash handling policy is outlined below:

  • Keep the amount of cash in the till to a minimum. Deposit excess cash in a POS safe.
  • Only authorised personnel are allowed to handle cash.
  • When cash drawers are not in use they should be locked.
  • Two authorised personnel should be present when cash is transported or counted.
  • Cash handling at the till and cash handling at the safe should be carried out by different people.
  • A cash activity sheet should record the movement of cash throughout the day. Staff signatures are required next to each activity to ensure accountability.

Tip #2: Create accountability

A cash handling policy goes hand in hand with creating accountability. However its worth emphasising that most cash loss problems are resolved with accountability. All stages of the cash handling process should be dealt with by different people. For example the person counting the cash has to then hand it over to the person in charge of the safe, who then verifies the amount and deposits it. The more staff involved in the process the easier it is to understand the stage at which the cash loss occurred. Making sure cash amounts are verified and signed for at each stage also acts as a strong deterrent.

Tip #3: Implement counterfeit prevention processes

There was over £5 million worth of counterfeit banknotes in 2015 alone. Yet counterfeit prevention is neglected in most small businesses. Sometimes manually checking a banknote can detect a counterfeit. For more advice on how to detect a counterfeit banknote be sure to visit the Bank of England’s website. Alternatively, if you want complete peace of mind it may be worth investing in an automated counterfeit detection machine. There are also UV detectors available which detect the majority of counterfeits. Whatever method you decide on, it is paramount that staff are actively looking for counterfeits. After all a counterfeit banknote is completely worthless and comes out of your bottom line profit.

Tip #4: Automate cash counting

Why count cash manually when a machine can do it quicker and more accurately? Banknote counters, coin counters and money scales make your life easier and increase efficiency. They also have a quick ROI. Cash handling machines can show counting results on a PC or a print out which improves accountability. Banknote counters also have 100% accurate counterfeit detection built in, so you don’t need to manually check the banknotes yourself.

Tip #5: Securely store cash

It goes without saying that cash needs to be securely stored. Ideally you should have a back office safe and a point of sale (POS) safe. POS safes are used to securely store excess cash from the till. POS safes can be mounted underneath a countertop. To securely store banknotes you simply have to drop one or more notes into the slot. Using the key the safe can be removed from the bracket and transported to the back office. Management then have a separate key that is used to open the safe and access the cash. POS safes are a proven way to increase efficiency and security. To find out more about effective cash handling, why not take a look at my article “Cash handling policies and procedures with a policy example.”


Andy Margison is the founder and director of ZZap Ltd ( @ZZap_online.