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How to Break Down Change for a Cash Drawer

Cash Security Procedures

Most businesses have a cash drawer. If you run a retail business, you’ll need a cash drawer in order to provide customers with exact change when they pay by cash. If you run a non-retail business, it’s still a good idea to have a drawer of petty cash on hand at all times. A cash drawer is a simple, lockable box with slots for dollars and coins. A cash drawer should have the correct amount of slots for each denomination of coin and currency with four slots to include $1, $5, $10 and $20 bills, and four smaller slots to include pennies, nickels, dimes and quarters.

Cash Drawer Breakdown

The typical amount stored in a petty cash box is $100. If you run a retail store, consider keeping up to $200 in your cash box on a daily basis. Although physical cash is used less and less these days, you don’t want to be caught without the means to provide change to a customer. If you find that your cash drawer is often running empty by day’s end, consider increasing the amount you keep in the drawer.

If you have decided that $200 works well for your business, make sure you have an evenly split amount of bills and a substantial amount of change as well. Twenty dollar bills and one-dollar bills are the most commonly used, so make sure you have a lot of each on hand in your cash drawer. You should also keep five-and-10-dollar bills and an even distribution of coins, even those pesky pennies.

Determine Maximum Cash Amount

Once you have determined how much cash you need to start with on a daily basis, determine a maximum amount that can be in the drawer at one time. Pulling excess money from the cash drawer during a shift is good cash management and is often called a “cash drop.” During busy retail seasons, you don’t want the drawer to become too full. This will create the temptation for theft and put you at greater risk of robbery.

Balancing Your Cash Drawer

At the end of each business day, remove the initial amount placed in your cash drawer and add up the rest of the money. This will tell you how much the business made in cash that day. A daily balancing of the cash drawer helps deter internal theft.

Where Should the Extra Cash Go?

Most businesses make a daily deposit at their bank. However, if you close late at night, it’s smart to store any excess cash in a safe then make a deposit during daylight hours. To this end, it’s a good idea to have a small safe at your business in addition to your locked cash box. This will ensure that your earnings stay secure.

Most businesses should keep a cash drawer, either for petty cash for customer change. Two hundred dollars is a standard amount to begin each day in a retail store. After closing, balance the drawer then store your earnings in a safe. Make a deposit during the next business day.

How Much Cash Should You Have in a Store Register?

The ideal amount of cash register money depends on the business

Retailers who take more credit card payments or checks than cash will not usually need much change on hand. But it’s always wise to have a little more petty cash available than you think you will need.

The question of available cash should be addressed during the business planning stage while establishing store procedures. When deciding how much change to keep in-store, business owners should consider a variety of factors.

How Much Money to Keep in the Cash Register

It may take a few weeks of dealing with the public before you can determine exactly how much money to have on hand and in the cash drawer. The amount of money a retailer should keep in the store will vary by:

  • Predicted or typical volume of sales.
  • How safely money can be stored.
  • The type of payments customers usually make.

As part of your store procedures, set the dollar amount of cash that will be in each register or cash drawer at the beginning of the day.   For example, if your average ticket is under $200, you may want to start with $200 per drawer or register. This amount should be evenly distributed among different bill denominations. Rolled coins come in set amounts; you should have even distribution of each, including pennies.

With customers frequently using credit cards, debit cards, or mobile payment methods, most retailers can keep a relatively small amount of cash available.

Check the number and dollar amounts of both bills and rolled change each day to make sure your store never runs short. If you find that you are constantly running out of a certain coin or bill, try increasing the amounts of each denomination you in your daily starting amount,

Balancing the Cash Register

In addition to determining the beginning amount of cash in the register, you will also need to set a maximum amount. When the amount of cash in the register exceeds that maximum amount, the extra will need to be put somewhere secure.  

Pulling money from the cash register and taking it to the store safe is sometimes called a “cash drop.”

Pulling excess money from the cash drawer during a shift is part of balancing the register, and it is good cash management. This reduces the amount of money on the sales floor and is especially useful during heavy sales times like the Christmas shopping season. Although every business wants high amounts of cash rolling in, it’s best not to have it too visible for safety reasons.  

In addition to the maximum amount for each register, retailers may want to keep an additional amount of cash and rolled coins in the safe to serve as an in-store bank.   The petty cash that will be available at the start of each day should also be established as part of your store procedures and can be used for:

  • Unforeseen situations, such as running out of paper products in the restrooms.
  • Occasional expenses, like treating the staff to coffee.  
  • Balancing the register during days with a high volume of sales or an unexpected number of cash transactions.

Access to a store’s safe should be limited to trusted personnel.

You will also need to balance the register at the end of the day.   When pulling all of the cash over the drawer limit, try to match the bill distribution to your starting point.  

Pulling out cash that exceeds the maximum amount at the ends of the day is sometimes called “cutting the drawer.”

Most retailers do not count the change for this purpose, only the bills. If your standard drawer amount is $200, you would leave $200 in bills in the drawer and only pulls change when the drawers get too full. However, some retailers pull the change as well for continuity.

If you leave the change in the register, you will still need to count all of it at night to balance the drawer.   This provides a check and balance system to help deter internal theft.  

Daily Deposits

Each night at closing, balance the cash drawer back to the starting amount. The amount of cash over the starting amount is your daily deposit and should be prepared according to your operating procedures.   If possible, two people should be involved in counting the cash drawers and preparing the deposit in order to minimize errors or fraud.  

Many retailers take deposits at night, but that can lead to safety concerns. You don’t want to endanger yourself or any employees by making them the potential target of a robbery. This is another time having a store safe is useful: many retailers choose to secure the money overnight in the safe and make the deposit at the bank during the day. If possible, two people should make each deposit as well.  

These are some best practices on how much cash a retail store should maintain in the cash register drawer at the end of the business day. ]]>