Every shop counts its cash at the end of the day. Fewer shops do a proper day close: a clear comparison between what the drawer should hold and what it actually holds, written down, explained and checked every day. That habit, an end of day cash reconciliation, is what catches small shortages before they become a monthly loss. Your cash book is only as good as your day close.
What is a day close?
A day close is the last task of the business day. You:
- work out the expected cash from the day’s records;
- count the actual cash in the drawer;
- write down the difference (short or over);
- decide how much cash stays as tomorrow’s opening cash and how much goes to the owner or bank;
- close the day so no more entries can be added to it.
Done every day, it takes about ten minutes. Skipped for a week, it becomes a puzzle nobody can solve.
How do you work out expected cash?
Expected cash is simple arithmetic:
Expected cash = opening cash + cash in − cash out
| Cash in | Cash out |
|---|---|
| Cash sales | Cash refunds to customers |
| Customer credit payments received in cash | Expenses paid from the drawer (fuel, cleaning, repairs) |
| Other income in cash | Payments to suppliers in cash |
| Cash put in by the owner | Cash purchases |
| Staff advances and tips paid out | |
| Cash taken by the owner |
The key is that every cash movement must be recorded when it happens. A small bill for cleaning supplies paid from the drawer and not written down becomes a “shortage” of exactly that amount in the evening.
Why keep card, mobile wallet and bank transfer payments separate?
Digital payments never enter the drawer. If a customer pays a 40.00 bill by card or mobile wallet, the bill is paid, but the drawer holds 40.00 less than if they had paid in cash.
At day close:
- list card, mobile wallet and bank transfer payments separately from cash;
- check each against the card machine slip, wallet app or bank statement;
- record transaction or reference numbers on payments so you can match them.
A common source of “shortage” is a digital payment recorded as cash by mistake.
How should you count your notes and coins?
Count your notes and coins the same way every time: largest note first, down to the smallest coin. For each one, write down how many you have and the amount, then add up the total. Write it on a count sheet or enter it in your software, so the count can be checked later.
| Note or coin | Count | Amount |
|---|---|---|
| Each note, largest first | how many | count × value |
| Each coin, largest first | how many | count × value |
| Total | cash in the drawer |
Tips for counting:
- Count away from customers, with the drawer closed to new sales.
- Have the cashier count and a second person check, or count twice.
- Face all notes the same way; it helps spot fakes and stuck notes.
- Keep a note of anything unusual: a torn note, a foreign coin, a cheque.
How do you find the cause of a shortage?
If the count does not match, check these in order. Most shortages turn out to be recording problems, not theft:
- Digital payment recorded as cash, or the other way round.
- Expense paid from the drawer but not entered.
- Refund given in cash without a return entry.
- Wrong change given, often on large notes during rush hour.
- Customer credit payment received but not recorded, or recorded twice.
- Opening cash wrong: yesterday’s closing count was not carried forward.
- A bill voided after the cash was taken.
Go through the day’s cash movements line by line. If you still cannot find it, write the shortage down with the cashier’s name and the reason “unexplained”.
What should you do about repeated shortages?
One unexplained shortage is a mistake. Repeated shortages are a pattern. Look at:
- Which shift or cashier they happen on.
- Which days: busy days point to wrong change; quiet days point elsewhere.
- Voids and discounts on that shift.
- Refunds without returns.
Shift handovers help a lot. When cashiers change, count the drawer and record it, so each person is responsible only for their own shift.
How should cash be handed over between shifts?
In shops that stay open long hours, one cashier rarely works the whole day. A clean handover protects both people:
- The outgoing cashier stops billing for a moment.
- Both count the notes and coins in the drawer together.
- The count is compared with the expected cash for that shift.
- Any short or over is written down and signed or recorded under the outgoing cashier’s name.
- The incoming cashier starts with that counted amount as their opening cash.
It takes five minutes and ends the most common argument in any shop: “it was already short when I came.”
How should you handle cash taken out during the day?
Owners often take cash from the drawer during the day for a supplier, a bank deposit or household needs. That is fine, as long as it is recorded every time, with the amount and the reason. Cash taken at noon and not recorded becomes a shortage of the same amount at night, and the cashier gets the blame. Make the rule apply to the owner too.
Why should a closed day stay closed?
Once a day is closed, no one should add or change sales, payments or expenses on that day. If a correction is truly needed, the owner should reopen it with a written reason. This stops yesterday’s figures changing quietly and keeps your cash book honest.
What should the owner check each day?
A two-minute daily habit:
- Day closed, with a count of notes and coins
- Short or over, with a reason
- Digital payments matched to statements
- Expenses from the drawer, with receipts
- Cash taken home or banked, recorded
- Tomorrow’s opening cash agreed
Once a month, look at all the shorts and overs together. Small differences that always go the same way are worth a conversation.
How long should you keep day close records?
Keep every day’s count, the shorts and overs, and the cash report for as long as you keep your other business records. Your accountant will want them at the end of the year, and they help if a question about tax or a staff dispute comes up months later. If you use software, make sure the day close records are included in your backups and can be printed or exported for any date. If you use paper, file each day’s sheet with that day’s bills, by month.
How does RMS handle day close?
In RMS, the cash book comes from every sale and payment. The drawer for today shows opening cash and every cash movement, and expected cash is the opening cash plus everything in, minus everything out; card, mobile wallet, bank transfer and any other payment types you add in Settings are listed separately because they are not in the drawer. At Close day you count your notes and coins, and RMS shows short or over and keeps the count; tomorrow opens with what was counted. A closed day takes no more sales, payments or expenses, and the owner can reopen it with a reason. Start my shift and End shift hand the drawer over between cashiers with a count, and a cash report prints the day’s summary. See reports and dashboard and the departmental store page.
Try RMS free for 14 days
Every installation of RMS starts with a free 14-day trial with all Pro features. No card is needed. Download RMS and do tonight’s day close with it alongside your usual count.