Reconciling Your Cash Box

The Cash Box general ledger account represents the amount of money in your cash drawer (cash box) at any moment in time. As you enter orders and payments throughout the day, the amount in your actual cash box goes up, and the Cash Box general ledger balance goes down.

When you deposit money from the cash box into the Cash in Bank account, record a miscellaneous cash receipt. Before you do this, however, reconcile the money in the cash drawer to the system totals to ensure they match. Different companies have different philosophies regarding their cash box. The following procedure is only a sample of how you might reconcile the cash box.

For a visual representation of this process, see Reconciling Your Cash Box Workflow.

To reconcile your cash box:

1. Determine the amount of money to keep in the cash drawer for making change the next morning.

For example, when you take money out of the cash drawer, you might leave $50.00 in smaller bills in the cash drawer. The system deducts this amount from your totals.

2. If you also use the cash drawer as your petty cash source, write a receipt for any amount you take from the drawer during the day. Count the receipts as cash at the end of the day.

For example, if a driver comes in to be reimbursed for $9.45 worth of tolls, write a receipt for $9.45, including the reason for the receipt, and give the driver the money.

3. Gather the money and receipts from the drawer and leave the starting amount determined in step one, in this example, $50.00.

4. Count the total amount you received in cash, checks, credit card payments, and your total receipts for the day. Count it again to verify that your calculations are correct.

5. At the end of the work day, run the Cash Box Journal Report in wide format, sorted by customer.

Running the report in wide format displays the payments received in cash, by check, and credit in separate columns.

6. Verify the grand total on the report with the actual total from step 4. If they match, go to step 12; otherwise, continue with the next step.

7. Verify the checks you received during the day.

   • Match the totals on the checks taken from the drawer to the transaction amounts shown in the Cash Box Journal Report. If the totals match, continue with step 8.

   • If you cannot find a corresponding journal entry for a check, try to find a similar amount and review the sales order. If the company on the check matches the company on the order, correct the online total; otherwise, keep reviewing sales orders until you find a match.

8. Verify the credit card slips you ran during the day.

   • Review the credit card slips taken from the drawer and match the totals on the credit card slips to the transaction amounts shown in the Cash Box Journal Report. If the totals match, continue with step 9.

   • If you cannot find a corresponding journal entry for a credit card slip, try to find a similar amount and review the sales order. If the company on the credit card slip matches the company on the order, correct the online total; otherwise, keep reviewing sales orders until you find a match.

9. Total the corrected amounts from checks and credit card slips and subtract this amount from the grand total in the Cash Box Journal Report to determine how much cash you should have.

10. Verify the cash you have received during the day.

    • Add up all cash and receipts taken from the drawer and match this total to the total from step 9.

    • If this amount is different, identify sales orders that have incorrect payments and correct them. The easiest way to identify potential data entry problems is to review the amount in the Open Balance field. If any except 0.00 displays in the field, update your cash amount until the open balance is 0.00. When an order's status is Invoice, this amount should be 0.00, indicating payment was applied.

    If you have more cash in your cash box than what displays in the Cash Box Journal Report, ensure that all payments for cash sales orders have been entered and applied. If you are unable to find the cash sale tickets to resolve the problem, try running the Invoice Register Report with terms set to COD.

11. Re-run the Cash Box Journal Report and return to step 6.

12. Write up a deposit slip for your bank, and settle your credit cards.

13. Post the amount shown in the Cash Box Journal Report as a Miscellaneous Cash Receipt to debit the bank the money was deposited into and credit the cash box. This increases your Cash general ledger account, and reduces your Cash Box general ledger account.

Select the Cash Box general ledger account, and enter the total amount on the Cash Box Journal Report from all the days since your last bank deposit. Create a separate cash receipt enter for credit cards to the appropriate bank.

14. Debit the appropriate expense accounts.

Example

The following series of calculations shows an example of closing out a cash box:

See Also:

Cash Receipts Overview

Reconciling Your Cash Box Workflow