How to Balance a Cash Register Drawer like a Pro (2024)

Balancing your cash drawer is as important a part of your routine as unlocking your front door and should be done at least daily.

If you usually put money in your cash drawer without thinking, you’re not helping yourself. Here, we break down why it’s important to—and how you can—balance your cash drawer like a pro.

• Why should you balance your cash drawer?
• Assign one person per drawer
• Best practices for managing multiple cash drawers
• Start by counting the cash
• Step-by-step guide to counting cash efficiently
• Troubleshooting common cash drawer discrepancies
• Deposit cash throughout the day
• Determine your end-of-day balance
• How technology can simplify cash management
• Regular audits and checks for cash register accuracy
• Training staff in effective cash register management
• Modernize your cash register with Lightspeed

Why should you balance your cash drawer?

As a merchant, you need to be concerned with cash flow within your business. Balancing your cash drawer has to do with all kinds of payment methods.

According to the 2023 FIS Global Payments Report, by 2024, cash is expected to account for only 8.7% of all POS transactions in North America. Digital wallets and popular mobile payment methods like Apple Pay need to be accounted for as well.

Balancing your cash drawer ensures all your business’s profits are accounted for and gives you a clear picture of where your business is financially.

While you may trust your staff completely, it is crucial for cash-based businesses to establish protocols for handling cash. These practices protect you and your staff by holding all parties accountable.

The most important reason you need to balance your cash drawer is to prevent shortages due to inaccurate cash handling or theft. But you also want to make sure that your staff is providing sufficient change to customers and that you never have too much cash on hand.

Assign one person per drawer

This might not be possible for smaller businesses with only one register, but limiting the number of people responsible for each cash drawer is ideal.

When more people have access to a drawer or even a drawer key, accountability for the contents of that drawer is harder to track. It also makes it difficult to pinpoint the individual responsible for any mishandled or missing cash.

Unlike traditional cash registers, iPad POS systems can help monitor and pinpoint which employees performed which transactions. If you’re using Lightspeed, each sale triggers the POS system to automatically update sales data so it’s easier to know how transactions are managed within your business and run reports to analyze performance.

Best practices for managing multiple cash drawers

Once you’ve implemented a solid cash handling policy that clearly outlines procedures for opening and closing cash drawers, assign specific responsibilities to trained staff members. Make sure they adhere to these guidelines.

Investing in a modern POS system can also streamline cash management. With Lightspeed, you can track sales, analyze trends, and get detailed reports. This improves accountability and gives useful information about your business’s finances.

Start by counting the cash

Balancing your cash drawer is as much about what you do first thing in the morning, as what you do at the end of the day. What does that mean?

You must always start your day by counting the already-existing cash in your till.

It’s best to keep a consistent base amount of money in your register. This ensures that your staff always has enough cash to give change to customers. From a client’s perspective, little is more annoying than handing over a twenty-dollar bill only to be told by the clerk that they don’t have enough money to make change. This is inconvenient for patrons and it can also prevent you from making a sale.

Though the exact amount might vary from business to business, make sure to have cash, sometimes referred to as petty cash, on-hand in the morning. For a small business, $100 to $150 should be more than enough. It’s good practice to keep at least $20 in five-dollar bills and $20 in one-dollar bills.

Step-by-step guide to counting cash efficiently

Set yourself up for success

Is your checkout counter full of stacks of paper? Is your team counting the cash on the corner of a table? Start by setting up a dedicated and organized area for cash counting. Make sure there are no distractions and that all necessary tools are at hand.

Sort it, stack it, count it

Set up neat stacks according to each denomination. (This should already be done thanks to the cash drawer’s separate sections.) It sounds self-evident, but this streamlines the counting process. It also minimizes errors.

Use things like currency straps and coin organizers to keep your cash organized. It also makes it easier to count (a roll of quarters is always worth $10).

Got lots of cash? Think about using a counting machine

If your business handles a lot of cash transactions, consider investing in a counting machine. These machines save time and are less prone to errors.

Routine is key

Make cash counting a daily habit. By being consistent, you and your staff will become more efficient. Closing out for the day will quickly become second nature.

Write cash handling policies

Develop, and then enforce, clear guidelines that your staff can refer to when they handle cash. Include them in training materials and refresh them when necessary. A consistent procedure reduces confusion.

Keep records

Cash is prized for its anonymity, but that doesn’t mean it shouldn’t leave a trace in your own bookkeeping. Keep meticulous records of cash transactions. You’ll serve your best interests by maintaining solid accounting practices. Soon enough, you’ll also be able to track patterns, which can inform your business decisions.

Add two-step verification

When a transaction involves a large amount of cash, make sure you double-check your figures. It doesn’t have to be complicated—it can involve having a trusted employee count everything after you’ve tallied it up, and comparing sums. This adds a layer of security and minimizes errors.

Troubleshooting common cash drawer discrepancies

Keep calm and count on

Cash drawer discrepancies are an unfortunate reality of doing business. Approach the situation methodically. Maintaining composure allows you to pinpoint issues efficiently.

Verify the day’s transactions

Start by cross-referencing sales records with the cash in the drawer. Make sure that each transaction is recorded accurately and that amounts match up. Human errors often happen when customers are paying for their bill.

Review your cash handling methods

Is each team member on the same page when it comes to counting out their cash register? Have new hires been well trained? Make sure your team is following established procedures. Inconsistent handling practices can snowball relatively quickly—and lead to costly mistakes.

Look into employee errors

Team trust is essential. And errors can occur—we’re only human.

If discrepancies can be attributed to staff, gently and discretely investigate the situation. It’s a learning opportunity for everyone. Where necessary, provide more training.

Tackle bigger issues

Are the same mistakes happening over and over again? Check to see if there are bigger issues within business operations: ineffective communication, unclear policies or bad habits are often at the root of cash handling discrepancies.

Stay accountable in your accounting

It’s easier said than done, but aim to foster a culture of accountability in your business. Everybody makes mistakes. The goal is to have staff who feel comfortable telling you about their errors. If you have a story about making this kind of error yourself, share it with your team—it shows you’re open to communication and eliminates the fear of retribution.

Deposit cash throughout the day

The next step in keeping a tidy cash register is to deposit cash throughout the day. Again, depending on the volume and size of your transactions, the number of deposits you will make will vary.

Choose a slower time of day to make your deposit. Then, count your cash and remove the difference from your initial morning count.

Have two people oversee the count, confirm the amount and watch the money as it’s deposited into your safe. This extra security measure ensures an additional level of checks and balances within your business.

Determine your end-of-day balance

Now is the time to ensure that transactions were handled efficiently and honestly.

The first step in doing this is to count the total amount in your till. This includes any credit, debit and cash transactions. After you’ve finished adding up the amounts, you should compare the number you came up with manually with what is displayed in your POS system.

If the amounts match, you’re golden!

If they don’t, you have a bit of digging to do. Small discrepancies are common and are usually caused by human error, possibly when a cashier was counting out change to a customer. It’s the larger, more glaring discrepancies that you’ll need to take a closer look at.

Finding discrepancies in your end-of-day balance

Keep in mind that if you’re using a POS system, software malfunctions can still happen. Make sure your software is updated to mitigate any technical risks.

The same can be said for cash handling devices: they sometimes break. If you use a cash counting machine, check it from time to time to make sure it’s in good working order.

There are a few different kinds of discrepancies that you need to be on the lookout for, both overages and shortages.

Overages are when the amount in your register is more than your POS system says you should have. Shortages, however, are where your POS system says you should have a certain amount of cash, but your till comes up short. Establish a policy for your staff to follow when it comes to handling cash and display it where staff can easily view it to keep everyone accountable and uniform at the register.

Overages can be more damaging to the brand of your business. While shortages mean that cash was either lost, stolen or too much was given back to customers, excess cash means that money was withheld from customers and adequate change was not returned. Though not done on purpose, an overage at the end of the day means your customers have been shortchanged.

When a customer realizes this happens, you might not only lose additional sales from them, but you might also accrue a negative review online or through word of mouth. Aim to do everything in your power to prevent overages from happening.

How technology can simplify cash management

A modern POS system and a digital payment solution—or an integrated platform that processes sales as well as payments—reduces the need for cash. This kind of technology also speeds up the payment process, reduces human errors and can simplify closings at the end of the day.

That’s what Mathieu Séguin at Cycle Néron found after making the switch to Lightspeed: “You know, you can’t punch in the wrong amount. All the information is transmitted to the system. It immediately gives the right information. That saves everything. I can cash out in two minutes.”

With a POS that tracks transactions, reconciles sales and processes payments, reconciliation is a breeze. And with Lightspeed’s POS, you can have real-time insights into the day’s performance from anywhere.

Regular audits and checks for cash register accuracy

Regularly check your cash counts to make sure they match your financial records. This helps find mistakes early and keeps your finances reliable.

Random checks on cash drawers can prevent mistakes. Knowing that audits happen makes your team stay alert and follow cash handling rules consistently.

Training staff in effective cash register management

Consistent, solid training practices set the foundation for effective cash register operations. Here are a few of the basic steps to take towards setting your staff up for success. If you’re looking for a more detailed action plan, check out our guide on the Dos and Don’ts of Retail Employee Training.

You can also check out our help center for detailed guides. Be sure to check out different training materials, as well, to accommodate different learning styles among your team: video tutorials, especially if there are updates to the POS, can be useful.

• Develop a training program and written training materials: think of this as a guidebook that you can keep next to your POS, just in case an employee needs to refer to something quickly. Include your policies on cash register management, including basic functions and procedures. Outline brief sections on how to handle cash, how to process transactions, how to void a sale, how to issue a refund and how to balance the register.
• Practice, practice, practice: there’s no better way to learn than by doing. Provide new hires with many different opportunities to practice different types of transactions. Have staff take turns role playing until new team members feel comfortable with the cash register. Keep staff updated on any changes in cash register systems, software updates, or modifications to company policies. Conduct refresher training periodically to reinforce good practices and address any emerging issues.
• Give constructive feedback and praise: assign your more experienced staff to oversee new team members during their first few shifts on the POS. Encourage them to give constructive feedback and address any concerns right away, to prevent bad habits from forming. Aim to create an environment that fosters collaboration. When employees feel comfortable asking questions—and admitting to any mistakes—training is even more effective.

Modernize your cash register with Lightspeed

You have everything you need to make sure your cash drawer checks out correctly between shifts and before you close out at the end of the business day.

To make your cash management and end-of-day balancing tasks even easier, it’s time to opt for a cloud-based mobile point of sale for your store or restaurant.

Let’s talk about how Lightspeed can make your operations as simple and efficient as possible.

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