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How Much Money Should I Keep in the Cash Register

How much money should you be keeping in your cash drawer as the proprietor of a gift shop? It's one of the fundamental concerns of any storeowner, and the answer can vary significantly depending on the business.

You want enough greenbacks and coin rolls to be able to supply customers with change, of course, but you don't want so much that you're highly vulnerable to theft or robbery.

Figuring out how much money you should have on hand in the cash drawer is partly a matter of trial-and-error, as Shari Waters notes.” If you're in the planning stages of your business, you'll probably have to tweak the amount based on a few weeks' worth of customer transactions.”

Plenty of basic factors will affect your calculations: for example, how many transactions you typically see during the day, the prices of the items you sell, and how many of your sales are usually conducted in cash, checks, or credit/debit cards. Your point of sale system should be able to provide these reports.

Start with some kind of reasonable, ballpark figure: say, $200 or $400. If you find yourself regularly short on change, it's time to increase the amount. If you've got several hundred dollars lying around at the end of the day, every day, then pare down the standard sum in the till accordingly. It's always smart, remember, to give yourself a little wiggle-room.

Remember, too, that the amount you'll want in the register might vary seasonally: Ahead of the Christmas shopping crunch, for example, you'll likely want to bolster the coffer.

Besides determining the optimum amount of cash to have in the drawer at the start of the business day, figure out how much is too much to have at any given time. If cash accumulates to that threshold, consider removing the excess and making a bank run. Doing your deposits during the day is a safer strategy anyway than waiting until closing time.

For example, if $200 is your optimum cash-on-hand amount, you might decide that $500 is a good upper limit. If you reach $500 in the drawer, you'd remove $300 or so to keep the coffer in check--and your store more secure. Some POS systems will even offer a notification to remove excess cash you do not want in the drawer.

As easy as it is, resist the temptation to pull from the cash register to cover those little daily expenses that come up. If you do so, you throw off your balance sheet. Instead, maintain a small, separate share of petty cash for such needs. (As with your cash-register supply, you should figure out pretty quickly just how much you'll typically want to have available for everyday running of the shop.)

While maintaining a reasonable amount of money in the till is partly about efficiency, there's no question that the security of your business--and your own safety--have to be taken into consideration in this sort of discussion. Too much money in the cash drawer can invite theft and, of course, make it all the more detrimental to your accounts if it does occur. Again, midday bank runs reduce your risk. You'll want an adequately safe and secure place to keep cash overnight.