If you are looking to become a manager or are currently a manager, reconciling a cash drawer will be one of your responsibilities every shift that you work. Every restaurant will have their own particular way of balancing a cash drawer at the end of the shift, but most of the principals will be the same from place to place.
In this article I’m going to go over the basics of why balance a cash drawer and how to do it.
Cash drawer basics:
When you balance a cash drawer you are trying to account for all of the transactions that were processed for that cash drawer during the shift. You are trying to make sure that all cash is accounted for, all credit card transactions have been recorded properly, tips have been distributed, money has not mysteriously disappeared (and equally important-mysteriously appeared). It’s incredibly important to make sure this step is a part of your regular operations.
How often should you balance the cash drawer?
Balancing daily is the norm and is what I recommend. If you only reconcile a cash drawer once a week, for example, you will have many different employee hands in one cash drawer with no way of holding anyone accountable for missing or additional currency. Balancing daily reduces the number of people accountable for what’s in the drawer, making it easier to track down discrepancies if (and when) they occur.
Where is it located?
In many traditional bars and restaurants cash drawers are located behind the bar. Diners and restaurants that process a lot of “to-go” food orders or gift certificates may also have a cash drawer at the host stand to speed up service. Servers will typically carry their own “bank” on them to make change for any cash transactions.
How do you balance a cash drawer ?
Don’t be intimidated: balancing a cash drawer can be a pretty easy task. Your POS will almost certainly have a report that gives you all of the information you need. Once you’ve run that report, simply:
- Add up all the cash that was taken in during the shift
- Subtract all of the credit card tips that need to be distributed
- Subtract any cash refunds
- What’s left is what should be deposited at the end of the night.
Cash taken in – Credit card tips – Cash refunds = Deposit
Note: Servers may give any excess cash to the manager on duty or bartender as part of their end of shift process. If the cash collected from the server is not enough to cover the credit card tips, the bartender or manager should pay them out the money that was due and record that amount on the daily paperwork.
Troubleshooting Common Problems:
Let’s face it, working in a restaurant or a bar can be complete chaos sometimes and problems can arise during a shift that will complicate your cash balancing process.
Here are a few examples of common problems and how to solve them:
Problem #1: Not enough cash on hand to pay servers/bartenders out for tips.
This will continue to happen more and more frequently as people are moving to credit card transactions instead of cash. Basically imagine a server only takes in $35 in cash, but their tips at the end of their shift equal $250, you would owe them $215. Now imagine you only have $50 in the safe to pay out the server. What do you do?
There are a few ways to reconcile this and each establishment will have their own systems to account for this. The most common solution I’ve seen is to write an IOU:
Possible Solution #1: Write an IOU
Write an IOU for $215 to the server and pay them out when you go to the bank and get the safe back up to operating balances. You could also pay them out the $50 that you have in the safe (so they can at least tip out the service staff) and write them a $165 IOU instead.
If you are in a pooled house, you would take in the $35 dollars, calculate the shares based off of the total tips taken in and write (hopefully only one unfortunate soul) an IOU for the balance.
Problem #2: Missing Money
A server or bartender comes to you and says they are having a problem closing their bank out. They mention that it’s been a very busy night and they seem to be missing some tips. This may be one of the harder scenarios to get to the bottom of, not just because it can be a real head scratcher, but likely it’s been a busy shift and both you and the server are tired and looking forward to the end of the night beer.
Here are a few common mistakes that may help you find the missing money:
- Missing Cash: This is always the first place I look. Did a customer pay cash and the server put it somewhere other than where they usually keep it? Could it be in a check presenter somewhere?
- Credit Card Tips: If they’ve looked through their bank and all of their cash transactions have been accounted for, have them go through and make sure that all of their credit card tips have been entered correctly. In the heat of service it is easy to miss a digit when one is entering their tips, or hit the wrong key when you’re in a hurry. Ask them to go through their cash out paperwork and go line by line to see if this may have occurred.
- Is there a check still open? Usually your POS won’t let you run your end of the night paperwork if you still have open tables/checks, but every POS is different. Look to see if they have any open checks or transfers that have not yet been closed.
- Incorrectly split checks & other weird transactions: Ask them if they had any weird transactions throughout the night. Examples may include: marrying 2 different checks or splitting a check many ways. Imagine that they have a nine-top and each person wants to pay individually. The server processes positions 1-7 perfectly with the correct credit card, but on the 8th check, the server authorizes the same check with 2 different credit cards. Check 8 now has 2 credit card authorizations associated to it and check 9 does not have any authorization associated to it all. Don’t worry, one of your more experienced servers will probably know how to fix this scenario. If not, the worst case scenario is to call your POS support number (I know, sorry in advance…) and have them walk you through the fix.
Hopefully focusing in on these areas will help you find your missing money and get you both to your end of the night beer faster!
Balance is a Good Thing
Hopefully this quick overview has illustrated that balancing a cash drawer doesn’t have to be tedious. It’s an important step for keeping your money in order at your bar, and once you’ve done it a few times it will become second nature.