How to Manage the Cash In Your Business

In my experience working with retailers, tracking the cash (the actual paper money & coins kind) is something that’s often messy and mishandled. Since there’s no real ‘paper-trail’, it’s important to have a tight process around recording all cash activities in your business.

My Recommended Process for Cash Management in Retail Stores

So, how should you track your cash? Here’s a simple, effective process:

Identify Your Daily Starting Cash:

Determine the amount of cash & change you need in your register at the start of each day so that you can accurately give out change throughout the course of your operations. This is going to be your starting balance at the beginning of every day, and the amount that you will KEEP in your register after the close of each day.

Count Your Cash Daily:

At the end of each day, count the cash in your drawer. Put your starting balance BACK into the register, and take the rest out.

Reconcile with Your POS:

The amount you withdraw SHOULD equal the amount of your cash sales from your point of sale system for the day. If it doesn’t, document it, and investigate if you can. This might mean checking for simple mistakes, like inaccurate change given, or more complex issues like employee theft.

Track It:

Keep a daily cash log like this one here, recording the date, cash counted, POS total, and any differences. This can be a simple spreadsheet or a dedicated cash log book. Consistency is key here; so add this to your daily to-do list

Deposit Regularly:

Schedule regular bank deposits—at LEAST weekly. This minimizes the risk of loss or theft and keeps your cash flow smooth. If you’re making deposits less frequently, ensure you have a safe place to store cash.

Review Weekly:

At the end of the week, review your cash logs to spot any recurring issues or patterns.

What to AVOID in your Retail Cash Management

Next, let’s address a common pitfall—using your cash for expenses. It’s tempting to dip into the till for those little purchases here and there, but this can quickly spiral out of control. Paying for expenses directly from your cash drawer makes it nearly impossible to keep accurate records. Instead, make it a habit to deposit your cash regularly into your business bank account and pay expenses from there. This way, you maintain a clear paper trail of your financial transactions, making bookkeeping a breeze and tax season less stressful.

If you have any questions on what I’ve shared here, feel free to send me a DM over on Instagram. If you need some additional guidance getting your bookkeeping & financial tracking systems in place, then I’d love to invite you to join us inside of Bookkeeping Made Simple for Boutiques.