How to handle your money for small businesses

For a small business, cash loss is a major problem. Small businesses have smaller margins, and cash loss not only has massive effects throughout the business, but is also very evident. Errors are uncovered without much effort to do so. That’s why proper and strict cash handling is always advised when it comes to preventing cash loss. This responsibility boils down to the handling of your profits by your employees, making sure that there are no errors in handling and the processing do not accumulate to major gaps in future profit.

The importance of cash handling

Proper and responsible handling of cash result to cash loss prevention, but plenty of business fail at this basic aspect of business. Why? The lack of proper training and guidance for their employees.
Often times in small businesses like convenience stores, food-stands, or bakeries, employees are not as populated as the ones belonging to corporate companies. Only one person is tasked with cash handling in every shift. However, if cash handling procedure is inconsistent with every person tasked to handle cash in every shift, or if the employees are lax and not paying enough attention, this definitely leads to cash loss. Inconsistencies in cash managing constitutes to inefficient work, cash loss or loss visibility to your money.

Consistent and proper cash handling guidelines

To make sure that your employees are efficient in handling your profits, implement a single cash handling guideline for them to follow. This way, the different ideas of your employees in handling cash is stifled away, and all of them share one idea on how to handle cash. Proper training is required for this and in the end, everyone should be able to do the same exact process for handling cash.

Discrepancies

Motivate your employees to handle cash with care, all discrepancies recorded, monitored and reported. Analyze these discrepancies critically, and see if such discrepancies happen during a specific person’s shift, how much they are and how often. These kinds of losses are not to be taken lightly as these things can actually be an attempt to defraud your business.

The slush fund

The slush fund is a surplus of cash from a profit that employees use and keep in the case of future losses and discrepancies in cash. This is motivated by the fact that cash loss and mishandling are often charged upon the employees pay. The slush fund is a way for them to cover these discrepancies and safeguarding their salary.

This may seem harmless, but this kind of tactics leads to loss of visibility to cash loss, and its degree. As a business person and an employer, you are oblivious to the extent of the problem or that a problem even exists. In many small businesses, cash shortfalls are seen as the responsibility of the cashier themselves, and many staff are encouraged to make up these losses from their own pocket. But, the consequence of this is often the creation of a ‘slush fund’ by employees. Make sure that this practice is discouraged upon your employees as it breeds only problems and dishonesty,