Control your cash better with periodic and surprise audits

January 14, 2014

Cash has a magical quality that can drive merchants crazy for good reason: It can disappear without a trace, if they’re not careful. To prevent that, documented cash handling procedures, employee training in those procedures, and cash controls are critical.


As for controls, the routine cash audit is an important tool, while the random surprise audit provides enough uncertainty to help even more in keeping sticky fingers out of the till and petty cash. The employees will know that they can be audited at any moment, which can be enough to convince them not to try, at the risk of getting caught and losing their job. Here are six points to keep in mind:


1. Purpose:  The purpose of a register audit is to ensure that the total of cash, check and credit receipts for the day, equal that time period’s business transactions. For petty cash, it’s a matter of ensuring the receipts for money taken out, and the cash left in, together add up to the total amount that’s supposed to be in petty cash.


2. Timing:  Retailers should conduct audits at least daily. If employees work in shifts, audits should be conducted at the end of each shift. That way any inconsistencies can be tied to those employees working a particular shift. This helps to isolate any problems, whether due to theft or mistakes, and who’s responsible.


3. Records:  Electronic registers provide running transaction records that can then be printed, exported to a spreadsheet or both. Usually these will total cash, check and credit transactions. Whoever is in charge of the business for that time period should do the counting of the receipts for each type of transaction. Voids should all be signed for and record kept of who made them to help identify patterns: too many voids can be a signal that someone either needs training or is stealing.


Petty cash needs its own logbook, to track receipts and cash expenses as they occur, including who received the cash and when. It should also record when and by whom the audit was conducted as well as any discrepancies and reconciliations. Always leave evidence or a trace of your audit control, which will allow tracking and referencing in case of any related future event or for the future responsible.


4. Process:  In addition to counting cash and checks and comparing totals with the register records, the person responsible should log into the web portal of their business merchant account to double-check that the total credit card transactions equal what the register reports. Why? Because these days anyone with a checking account and smartphone can open a merchant account in literally five minutes with Square or Intuit’s GoPayment and get a smartphone card reader they can use to redirect credit card transactions to their own bank account.


5. Surprise: Owners or managers should conduct surprise audits on a seemingly random basis, so employees don’t try to work around the routine audits. It’s like burglars who know the routine of a night guard and use that to gain entry when the guard’s not around.

What’s more, if the owner’s not the one doing the audits, then those conducting them should also be subject to surprise audits. Many businesses have suffered serious pain due to dishonest managers and bookkeepers. Ideally, to achieve a certain level of independency, the audits are not performed by individuals involved in daily operations or direct oversight..


6. Outsource:  Technically, the less someone is exposed to cash, the less he/she will be tempted to fraud or theft, so how the money is handled and stored has a significant impact on your risk of exposure. The idea of outsourcing cash handling and cash management to a secure, qualified and bonded cash logistics company like GardaWorld can be the most secure solution for business owners and honest managers. Fact is, GardaWorld’s CashLINK system, with its smart safe technology, can minimize the amount and availability of cash that’s exposed to theft, thereby reducing the occurrence of theft. In addition, they can gain huge time savings as a result. To find out more, visit