Why Closing Your Registers at the End of the Day is Essential for Retail Businesses
In the fast-paced world of retail, every detail matters when it comes to running an efficient and profitable business. One detail that can easily be overlooked but holds great importance is the simple yet crucial practice of closing your registers or tills at the end of each business day. This ritual may seem like a no-brainer, but its implications for financial tracking, security, and overall business management cannot be overstated. In this post, we will delve into the critical steps for closing your tills and discuss the numerous benefits that this practice can bring to your business.
The Steps Needed to Close A Register
Balancing Cash and Payments
Closing the register marks the end of your business day, starting with balancing the till, EFTPOS included. It's vital to ensure all cash and other payments align with the day's sales transactions, a process known as reconciliation.
Ensure your float is accurately recorded in your POS system. Note down any discrepancies in cash or EFTPOS transactions during closure to ease later reconciliation in the accounting system.
If discrepancies arise, investigate the cause before wrapping up. Common issues could be incorrect change given, unrecorded cash taken from the till, wrong amount entered into the EFTPOS machine (if not integrated with your POS), or payment type mismatches. Identify and correct these discrepancies where possible, or note them down in the register closure for the accounting team's review, keeping the reconciliation process transparent and manageable for all.
Generating End-of-Day Reports
Once you have reconciled the register, the next step is to generate end-of-day reports. These reports can include sales summaries, inventory levels, and other key performance indicators (KPIs) that provide an overview of the day's operations.
Secure Cash Handling
After reconciliation and reporting, the cash needs to be removed from the register and securely stored, either in a safe on-site or prepared for bank deposit. Never leave cash in the register overnight as it's a security risk.
If you are not banking daily ensure that you keep a daily running tally so your bookkeeper knows what period the cash relates to.
Turn off the register or put it in a secure mode, as per the manufacturer's or software provider's instructions. This helps to reset the system for the next business day and can help with software updates or backups that might be scheduled.
The Benefits of Closing Registers Daily
Accurate reconciliation and reporting are vital for understanding your business' financial health. Mistakes can lead to skewed data, which can affect decision-making and, ultimately, profitability.
With most integrated POS systems, once you have closed your register it will sync an end of day invoice into your accounting system. Some systems send it across as a paid invoice for you to reconcile your payments. With financial institutions now depositing daily takings into your account on the following day, ensuring you close your register daily will facilitate a smooth and speedy reconciliation in your accounting system.
Emptying the cash drawer and securing the register at the end of each day minimizes the risk of theft or unauthorized access to sensitive data.
Consistent end-of-day procedures can lead to smoother operations so it is important to keep your staff trained in the procedures to ensure that variances are minimized. With daily reconciliations and reports, it also means retailers can make quick decisions about inventory or staffing needs.
Compliance and Record-Keeping
Maintaining rigorous end-of-day processes can be beneficial in case of audits or for maintaining compliance with local and federal tax laws.
Peace of Mind
Knowing that you've closed the day properly allows you and your staff to start fresh the next day, without any lingering uncertainties or complications. This practice not only instills a sense of operational discipline but significantly enhances the security of your business. By adhering to a strict closing procedure, you minimize the risks associated with theft, fraud, or even simple accounting errors.
Not Just Best Practice
Closing your registers or tills at the end of each business day is not just a best practice; it's a necessity for maintaining a well-run and secure operation. The steps involved, including reconciliation, reporting, and secure cash handling, are cornerstones of effective retail management. The benefits, ranging from financial accuracy to enhanced security and operational efficiency, make it an activity that provides far more value than the time it takes to complete.