Donna Bordeaux explains how to run a tight cash drawer: only remove cash for customer change, use pre-written checks instead of petty-cash slips, never let owners dip in, refund card payments back to the card, and pool tips through payroll. Report any exceptions by email.
Hi, it's Donna Bordeaux. I am often asked about taking cash out of the drawer and how to report it so that we know that where that money came from out of the drawer. So I want to discuss that a little bit more in detail. And I want to first off say this is going to be more of a public service announcement than a technical way of doing things. First, I like to eliminate any excuse to take any cash out of the drawer. The only method of taking cash out of the drawer should be to give a customer change who is paid in cash. So picture this as a studio owner. If you are looking at a camera that is directly over your cash register and you see an employee go into the drawer, when is the only time you want to see them take money out? When they're putting money in. Anytime that you allow for cases of people taking money out of the cash drawer, you are psychologically giving them permission to do that. And a little bit of permission leads to more and more and more. Secondly, a big case for this is there is no tracking at all on what cash comes out of the drawer. Even if you are meticulous about writing little petty cash slips like we used to do in the old days, it gets really messy and it gives a lot of excuse and leeway to employees that lead them into things that you will not want. Some employees will take advantage of things if it's out there, and some may not, but may see another employee do it. And then one thing leads to another and you've got employee theft issues. We want to steer completely away from that as much as possible and prevent any issues of potential employee theft. And the best way to do that is to eliminate all possible reasons why somebody would have their hands in the cookie jar except to give change to a customer. So first off, I'll hear answers like, well, I have to pay the window washer and I pay him in cash every week. It's only $10. All right, let's eliminate that. You know the window washer is coming. Put a blank, not a blank check, but put a check in the cash drawer that's written out pre made to the window washer for the $10. And when he comes to do the job, have your staff give them the check. You also now have a built in receipt when that check gets cashed to know that you had that expenditure. It also gives you proof to the IRS standpoint in case you're ever audited that you did pay that expense. Secondly, never, ever as an owner, take draws out of the drawer, it again gives your Employees psychological permission to do the same thing, and we don't want to do that. Next up, one other tip. Remember that when a customer pays by credit card, if you have to give any refund or any adjustment at some point in the future, that should go right back on the credit card. It should not be paid out in cash. Again, we don't want any excuses why we have to dip our hands into that cash drawer unless a customer is directly in front of them and getting that cash back. And lastly, a big one is tips. I strongly suggest that every tip payout go through an employee's payroll. Again, several different psychological issues here. If I ring up and I say, I got a $5 tip, I used to own a hair salon, I know what happens. I'll just pull five bucks out. Even if I didn't get the tip and all of a sudden the drawer is only $5 off, it would be okay. And then next week it's only $10 off, it's only $50 off. And this leads down a psychological path. Depending on how strict of an owner you are, it may take you a long while to realize it. And if one employee does it and doesn't get caught, guess what? You're almost giving permission to other employees to do the same thing. Also, I find that by grouping the tips and they're larger and paying them out through payroll, first off, you're accomplishing the right tax consequences. Secondly, it's more like a bonus because it's a bigger number. It's not. You know, nobody really gets excited about a two dollar tip, a five dollar tip. But if they're getting fifty dollars in tips, yay, that's something to celebrate. So it makes you as the owner look better and that they're getting a bigger paycheck too. So do yourself a favor, look at anything that comes out of your cash drawer and find a way to eliminate that. It will do you so much better and less record keeping, less hassle. And then you won't even have to ask me how to report those things. If by chance you do have to have an emergency outbreak of something that has to come out of that cash drawer, the best way to report it to us is just shoot us an email and let us know or respond to that monthly email that you get on the 1st of every month that tells you to tell us if there's anything important we need to know. Thank you very much and I hope this helps. Have a great day.
