These days cashless financial transactions enable business to be done in person and all over the world very quickly, but cash is still used widely in certain environments such as hairdressers, beauty salons and on market stalls.
While cash transactions are open to fraud such as the use of counterfeit currency, so too are cashless means of payment such as credit card cloning especially in card not present (CNP) transactions, and writing forged checks (although this can be addressed through using advanced tamper proof checks).
Is cash still king?
Cash transactions are obviously limited to face-to-face purchases where money physically changes hands. There’s also the security risk where higher amounts of cash are susceptible to theft or the use of counterfeit currency – a very real threat when you consider some $70 million of fake currency is in circulation in the US.
Also, cash businesses are often closely monitored by the IRS (Internal Revenue Service) and banks will report larger transactions to them as it’s all too easy for a percentage of cash transactions to go deliberately unreported for tax purposes.
It’s tempting to become a little slipshod when it comes to cash payments, but careful record keeping will ensure you track transactions and that no money gets ‘lost’ and remain undetected.
Large cash transactions of $10,000 or more (whether one large one or two or more related transactions) have to be reported to the IRS using an 8300 form within 15 days.
Using electronic point of sale tech (EPOS) is an ideal way of conducting secure transactions as it ensures all purchases are recorded – even at temporary sales outlets such as stalls at fairs and open-air markets thanks to mobile technology.
If linked to stock inventory control, then it builds up an accurate record of stock levels balanced with cash taken for purchase so the two are reconciled. This makes for a more efficient and safer environment and will be looked on favorably by the IRS keen for cash businesses to keep accurate records.
Keep a small fund to pay for ongoing purchases rather than mixing these up with proceeds from business transactions; retain receipts and keep the petty cash replenished. Paying for items from sales whilst vowing to pay it over from petty cash when you’ve replaced the cash could skew your record keeping if you forget to do this.
Safe and secure cash handling
Staff should be trained properly in msp, not only how to check bills for forgery, but how to generally handle and look after cash to avoid losses and theft.
- Ensure higher denomination bills are removed from the till regularly and stored in a safe
- Don’t turn away from customers with the till open
- Ensure all sales are properly recorded – easier with EPOS
- Arrange security cash collection from your premises if amounts warrant it and you qualify
- If taking money to the bank, vary your routine so it’s not always the same time and route each day
- Have signs up clearly stating money is not left in tills overnight and the staff have no access to safes
- Keep any cash counting well away from customer facing areas
Can you go cashless?
While you may not be able to go entirely cashless, it’s worth asking yourself if at least some of your transactions could be.
For a start it may help you gain more customers as more people carry less cash and use cards and other cashless ways to pay; it could make the difference between losing sales to your competitors if they offer cashless payment options and you don’t. For now it’s new and exciting, but you don’t want the times to pass you by and for your business to fall behind.