Cash is the asset most exposed to theft, error and robbery, and the one most often handled by the newest employees. A cash handling procedure does three things: it makes every dollar traceable to one person at every step, it limits how much cash is in one place at one time, and it keeps employees out of harm's way. The procedures below fit most retail stores, restaurants and service counters.

Four principles behind every good cash procedure

Individual accountability

One person per drawer per shift. When several people share a drawer, no shortage can be traced.

Dual control

Two people count and sign for safe contents, deposits and change orders, so no one handles large sums alone.

Limited exposure

Keep registers lean with regular drops to a safe, and get deposits to the bank promptly.

Documentation and review

Every count, drop and deposit is recorded, signed and reconciled, and someone reviews the records.

Opening, shift change and closing

Point in the dayWhat happensWho signs
OpeningEach drawer is issued with a fixed starting bank, counted by the cashier in front of the managerCashier and manager
During the shiftCash above a set level is dropped to the safe; each drop is recorded on a drop logCashier, with a witness or camera view
Shift changeThe outgoing cashier's drawer is pulled and counted; the incoming cashier gets a new counted bankBoth cashiers and the manager
ClosingDrawers counted away from the sales floor and reconciled to the point-of-sale report; overages and shortages recordedCashier and manager
DepositDeposit prepared under dual control, sealed in a numbered bag and loggedTwo employees
  • Count in a back office with the door closed, not at the front counter or in view of windows.
  • Set a tolerance for overages and shortages, and track them by cashier. Repeated small shortages, or repeated overages, are worth a conversation.
  • Require manager approval for voids, no-sale openings, refunds above a set amount and paid-outs, and review those reports weekly.
  • Keep the safe locked except when in use, limit who has the combination, and change it when an employee with access leaves.

Counterfeit currency

The U.S. Currency Education Program teaches a simple check: feel the paper for the slightly rough raised printing, tilt the note to see the color-shifting numeral change from copper to green on $10 notes and higher (and, on the $100, the 3-D security ribbon move), and check with light for the watermark and the embedded security thread. Rely on these security features rather than a single test. Train cashiers to give large bills a quick check when they receive them, not at the end of the shift.

If a cashier suspects a counterfeit, Secret Service guidance is to:

  1. Not return the note to the person who passed it.
  2. Delay the passer if it can be done safely, and note their description and any vehicle.
  3. Contact local police or the nearest Secret Service field office.
  4. Write initials and the date in the white border of the note, handle it as little as possible and place it in an envelope.
  5. Hand it over only to an identified police officer or Secret Service agent.

Safety comes first. Tell staff never to argue with or physically stop a customer over a suspected counterfeit. Let the person leave and report it.

Safes, deposits and robbery safety

OSHA's recommendations for late-night retail treat cash control as a workplace safety measure: use drop safes to limit the cash available to cashiers, post signs saying cashiers have limited access to cash, keep registers visible from outside, maintain good lighting, and have written procedures and training for robberies. Practical steps include:

  • Use a drop safe or time-delay safe at each register area, and keep register cash to the minimum needed to make change.
  • Vary the time and route of bank deposits, do not carry deposits in a bank-branded bag, and send two people or use an armored car service for large deposits.
  • Do not count cash where it can be seen from the street, and do not leave the safe open during business hours.
  • Train employees that, in a robbery, they should cooperate, avoid sudden movements, not chase or resist, and call police once it is safe. Afterward, lock the door, preserve the scene and write down descriptions.

Our guide to workplace violence prevention for retail covers threat response in more detail, and security cameras explains how to cover registers, safes and back offices.

Large cash payments: IRS Form 8300

A business that receives more than $10,000 in cash in a single transaction or in related transactions, including installment payments that add up to more than $10,000, generally must file IRS Form 8300 within 15 days. Since January 1, 2024, businesses that must file at least 10 other information returns in a calendar year must file Form 8300 electronically. The business must also send the customer a written statement by January 31 of the following year and keep a copy of each form and its supporting records for five years. In some circumstances, cashier's checks, bank drafts, traveler's checks and money orders count as cash for this rule.

This is an overview only. Ask your tax advisor how the rule applies to your business, especially if you sell high-value goods.

Where insurance fits

Cash is generally not covered property under a commercial property policy, and property policies generally exclude employee dishonesty. That gap is what commercial crime insurance fills. Common crime coverages include:

Crime coverageWhat it typically addresses
Employee theftMoney, securities and other property stolen by employees
Money and securities (inside the premises)Theft, disappearance or destruction of cash on site, including robbery and safe burglary
Money and securities (outside the premises)Cash in the care of an employee or armored car, such as a deposit on its way to the bank
Money orders and counterfeit moneyCounterfeit currency accepted in good faith in exchange for goods or services
Forgery or alterationForged or altered checks drawn on your account
Computer and funds transfer fraudFunds transferred out on fraudulent instructions or through a compromised system

Limits, sublimits, deductibles and conditions vary by carrier and policy. Some policies set conditions such as a locked safe or a maximum amount of cash on hand after hours, so your written procedure should match what the policy expects. An employee hurt during a robbery is generally a workers' compensation claim. If you also take cards, see PCI compliance for the electronic side of payments.

Cash handling checklist

  • One cashier per drawer, counted in and out every shift
  • Manager approval for voids, refunds, no-sales and paid-outs
  • Drop log and a register cash limit
  • Dual control for safe counts, change orders and deposits
  • Deposits made daily, with varied times and routes
  • Counterfeit checks trained and posted at each register
  • Written robbery-response procedure, trained at hire and yearly
  • Over and short tracked by cashier and reviewed weekly
  • Form 8300 process for cash over $10,000, reviewed with your tax advisor
  • Crime coverage limits reviewed against peak cash on hand and employee access

When to call a broker

Call us if your cash volume grows, you add locations, you change deposit practices or you start accepting large cash payments. We can check whether your crime limits fit the amount of cash on hand at peak, whether coverage extends to deposits in transit, and whether any safe or alarm conditions apply. For a broader look at shrink, see retail loss prevention strategies.

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