Some elements of hospitality are reassuringly traditional.
There’s the check in at the hotel desk, the process of tipping the waiting team for a job well done and the momentary feeling of importance you get when the concierge arranges for your car to be parked in the underground car park.
Among a sea of tech wizardry and social media influence, this stuff makes the industry what it is.
And that brings us onto cash registers. No, really – this is one of the most important routines in modern restaurant and hotel operations, and it’s about as traditional as they come.
It’s also scarily easy to get wrong, so consider this your one-stop guide for how to balance a cash register till.
Why is it so important to balance a cash drawer?
With one in 10 adults having gone cashless in the UK alone, you’d be forgiven for assuming cash drawers are something of a relic.
This simply isn’t the case. For many of us, cash really is king – still. A 2018 study revealed that 83% of US consumers would miss cash if it vanished forever.
So, cash will still be rolling into your hospitality business at a fair old rate for a while and, regardless, the emergence of new payment methods like Apple Pay means balancing the cash drawer is now more important than ever.
You need to account for all of the cash that enters your business, no matter how it does so. This ensures all of the profit you generate is properly accounted for and gives your business a much clearer financial picture.
It’ll even help you forecast and plan for the inevitable peaks and troughs your business will experience.
But… I trust my employees!
No matter how much you trust your employees, you need to accept that, because your business handles cash, there is always the option for the nefarious among them to take advantage.
It’s estimated that businesses in the US lose an average of 7% of their annual revenue to employee theft annually.
This doesn’t mean you need to watch your back at every turn as the business owner, but it does neatly illustrate how important the restaurant cash register and your ability to balance it are.
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3 vital things to remember for balancing your cash register
Before we get into the process, here’s three vitally important things you’ll need to take into account every time you balance your cash registers.
1. Always have one person per drawer
It might be tempting to cut costs and have just one draw for everyone, but we really recommend investing in as many as you have staff on service at any given time. The more people that have access to the same cash drawer, the more you’re spreading accountability for what takes place within it.
2. Start your day by counting cash
It’s easy to assume that balancing a cash drawer is something that only needs to take place at the end of the day. Not so. Make sure you start every day by counting what’s already in your till. This ensures you can keep a consistent, sufficient amount of base cash in your register to satisfy demand and make the end of day balancing process easier.
3. Deposit cash throughout shifts
A tidy cash register is a healthy cash register. During slower periods, make sure you deposit cash, count the cash present and remove the difference from your morning count. Do this in twos to ensure there’s two sets of eyes on each deposit and count. Make this a habit and your balancing should be far easier to undertake.
The 5-step process for balancing cash registers
Now we know the what, why and when of balancing cash in your business, here’s how to do it in five simple steps.
Print the following list out, attach it to the wall near each till and make it your team’s mantra!
1. Determine your ideal starting amount
It’s important for your cash register to contain a consistent number of coins and notes so that you always have enough change for customers.
Equally, too much cash in the drawer might incite theft, so it’s important to keep it under control with a solid starting amount.
Decide on a base amount of cash you’ll retain in each register to handle the transactions you’re likely to encounter each day. A look back at revenue reports day-by-day will help you here.
2. Keep one employee per register
We mentioned this in our quick tips above, but it bears repeating.
One employee per register means you have one line of accountability and a far more efficient dining operation thanks to fewer mistakes from ‘too many cooks’ syndrome.
3. Run an X read
When you reach a stopping point (usually a change in shift), run an X read on your POS system. Print it out and pull the cash drawer, before retreating to a discrete area.
4. Conduct the physical count
Withdrawn cash drawer and X read to hand, begin the physical count.
Tally up the sum totals of all coins, notes and PDQ receipts and compare the result to the totals on the X read.
Providing no mistakes have been made in giving out change (or worse), everything should tally. Just bear in mind that it’s not unusual to have a minimal amount of cash shortages, as these are usually more common than overages.
5. Don’t forget the cash drop
A cash drop is when a senior member of staff manually removes and deposits cash into the drawer. This will help you keep up with customer transactions and ensure that all-important base level of cash (see step 1) is maintained.
The frequency and timing of these drops is entirely up to you, but it makes sense to do so when trade dips a little in order to avoid disrupting service.
When a cash drop occurs, make sure the employee who conducted it is recorded along with the time, date and amount of the drop. Ask the cashier to sign off the transaction to ensure the responsibility for working with the new balance is recorded.
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How to balance a cash register – FAQs
Q: What does balancing a cash register mean?
Balancing a cash register refers to the process of ensuring the money contained within the cash drawer accurately reflects that day’s (or shift’s) business transactions.
Q: What is the correct way to put notes into a cash drawer?
To make balancing easier, it’s best to place notes facing in the same direction so that the note amount is located in the same place during the physical count.
Q: What if I exceed the amount of a particular note?
If you take more notes than the drawer insertion can handle, clip the excess notes together and move them into the compartment under the drawer. To avoid having to do this, ensure cash drops and removals are carried out regularly by senior staff members.
Q: What’s the difference between an X and Z read?
X and Z reads on modern POS systems essentially provide the same information if run at the same time, but an X read gives you a read (or preview), whereas running a Z read will reset the till report.
Q: What should I do if the cash doesn’t balance?
If your cash doesn’t balance, speak to a senior member of staff. Record exactly how much it is out by and where the discrepancy lies in terms of the receipt type (this should be identifiable by comparing all physical receipts and cash with the X read).
Q: Can I trust the POS for cash balancing?
Yes. A modern POS system should always give you an accurate X and Z read, and most feature user-level auditing, so every transaction is time- and date-stamped against the operative in question.
Q: How many cash drops should I conduct?
This is entirely up to you, but it’s important to remember that the main goal is to ensure your starting balance is never reduced and that you have enough cash in the till to serve customer transactions.
Q: When should I implement cash register balancing?
It’s typically best to balance your cash register at the end of the day or when a cashier’s shift ceases.
Some things never change, and the process of balancing a cash register is a perfect example of an age-old hospitality routine that every business in the sector needs to follow to the letter.
We hope our guide will become your cash register balancing bible. Why not share it with your staff to ensure you’re all singing from the same hymn sheet?