Cash theft ranks as one of the most common frauds perpetrated on small businesses, according to the Association of Certified Fraud Examiners (ACFE). To ensure your business is protected from theft, develop and implement a strong cash-handling policy. Here are some ideas to help create a working policy to protect your cash.

• Keep duties separate. If one employee receives cash, someone else should prepare or oversee preparation of the cash deposit. A third person may record transactions in the company books. Although such separation of duties can be hard to implement in a company with few employees, creative owners can find ways to prevent such transactions from being concentrated in the hands of a single person. For example, you might cross-train staff so that today’s accounting clerk is tomorrow’s cashier. Or a supervisor might periodically assume one of those functions.
• Document cash transactions. Develop a cash count sheet that records the names of people removing money from the safe. Also document the date and time money is transferred for deposit. Include signature lines for both employees involved in the task. Have another employee routinely compare deposit slips and bank statements with cash count sheets. When cash is placed in the safe, record transactions with a similar detailed record.
• Store cash securely. Lock cash registers when not in use. Minimize cash on hand by requiring employees to periodically transfer excess cash to point-of-sale (POS) safes. Because such a system allows for one-way access only, it helps prevent cash skimming. POS safes should be unlocked only when cash is transferred to the back office safe. Limit safe combinations to authorized employees and ensure that combinations are routinely changed.
• Conduct internal audits. Employees should expect their cash-handling activities to be scrutinized. Inform staff that there will be surprise cash audits and detailed reviews of company books if irregular transactions come to light. If your company uses a currency counting machine, you might also print and review a sample of cash-count reports.
• Communicate policies. Make sure your policy is clear and straightforward. Post it throughout the workplace. Discuss it with new hires and share it in staff meetings.
• Hire wisely and train. Conduct thorough background checks. Once staff are on board, train them to implement your cash-handling policy until it becomes second nature.
• Set Limits on Cash Handling. To enhance security and minimize risks, it’s important to set limits on the amount of cash employees are allowed to handle at any given time. Implementing regular cash drops can help manage excess cash and prevent potential theft or mismanagement. Additionally, establishing a maximum cash balance that can be kept on-site will further reduce exposure to loss, ensuring that large sums of money are not left vulnerable. This approach creates a safer environment and promotes more responsible cash-handling practices.