When it comes to keeping tabs on your cashbook, your primary control will always be your staff – but how can you ensure your staff are getting it right?

Whether you own one shop or thousands, trusting others to maintain your cashbook for each shop is a daunting step. Of course, primary controls, such as proper training, procedures and checks go a long way to minimising any risk, but there will always be negligence, mistakes and theft to contend with. So what are the appropriate primary controls and what happens when they fail?

What are Primary Controls?

In order to discourage theft and errors in our cash handling and cashbook entries a number of controls should be in place:

  1. Training – Staff in a position of responsibility (supervisors, assistant managers etc.) receive supervised training to ensure they understand the steps involved in balancing the cash drawer.
  2. Investigation – Overages or shortages are investigated immediately. Regular discrepancies are usually the result of theft or human error and more training or controls may be required.
  3. Reporting – Daily cash drawer reports are filled out at the end of every working day with receipts stapled to it. This provides a quick summary of the day’s take and allows us to spot mistakes quickly.
  4. Separation of duties – Assigning each staff member a cash drawer and using two people to balance the cash drawer adds an extra layer of accountability and an enhanced audit trail.

What happens when controls fail?

At some point, despite all good intentions, one or more of these controls will fail. Your staff may miscount, misreport information or even steal some cash from one of your shops. Fortunately, there is another step between cash reporting and our final reports: bank reconciliation.

reconciliation management process, cash management controls

Where does Bank Reconciliation come in to play?

Bank reconciliations allow us to compare the amount of cash we’ve actually received with the amount we should have received. If the amounts do not match then it indicates that something has gone awry. However, with good controls in place the audit trail should be relatively easy and help to isolate the source of the discrepancies.

If you are unsure as to how to complete a bank reconciliation then we suggest you read our previous blog: How to audit your bank reconciliation statement

However, before you start thinking about using a spreadsheet to complete your bank account and cash reconciliation…think again. Spreadsheets cost far more in errors than they save by not buying the appropriate software. Do you know really how spreadsheets can work against you? Find out the secret cost of spreadsheet reconciliation on your business – in our free infographic.

Of course the flow of cash, credit and other balances within a big retailer is extremely complex. That’s why we have compiled the ebook – Control the transaction flow’ – Download the ebook free today to help you gain better control and visibility over your accounts.

Over to You…

What reconciliation issues are the most common for your business? Let us know in the comment box below, and Adra Match might write a blog on it!