Optometric Management Tip # 324   -   Wednesday, April 16, 2008
Balancing Your Cash Drawer

I think it's important to operate the business office of your practice as if it were a bank. That means specific procedures are followed every day to ensure an accurate accounting of all monies. These steps are necessary even if you have a small practice and fully trust all employees who handle financial transactions. Monitoring the process of collecting and depositing payments lets you know if errors are being made and gives you a basis for preventing them. A daily routine to balance sales with the bank deposit prevents employee carelessness and possible embezzlement in the future.

I believe the balancing of the cash drawer and depositing the receipts into the bank should be delegated to staff, but the process should be reviewed by the practice owners. Staff members may email the production report each day to the owner or leave the printed document in a predetermined place. The deposit should be entered into a financial software program (such as QuickBooks) and the owner will review it daily. Having the ability to log onto the practice computer system remotely may facilitate the owner's supervision from home or when traveling.

Two cash drawers

Accurate accounting of deposits every day is made easier by using two cash drawer trays. These trays are used alternately every other day. Each drawer tray starts out with exactly $200 in cash in various denominations of bills and coins to make change. Cash, credit card receipts, personal checks and insurance checks are added to the drawer as the payments are entered into the practice management computer system.

When, where, how to balance

There are two distinct steps your staff will perform to balance the cash drawer. One is closing out the drawer and the other is balancing the drawer with the daily production report. Often these two activities are performed at the same time, but they don't have to be. You can decide when these activities work best into your office routine based on your staffing levels and how busy the office is at certain times of the day. But once you decide on a time of day, I recommend you stay consistent. A consistent routine improves accuracy and is less likely to be forgotten or modified.

The closing of the cash drawer is generally performed near the end of the business day. In order to help our employees leave the office promptly at quitting time, we close the drawer about a half hour early. This may mean that some of today's sales will be shown on the following day's production report, but that does not matter to me. To close the drawer, the staff runs and prints the daily production report on the practice management software system and the cash drawer is exchanged for the second drawer. At this point, the cash, checks and credit cards slips in the drawer, minus the $200 starting cash, should exactly equal the total payments shown on the daily production report.

The cash drawer and the corresponding production report can be balanced at that time or may be stored until a more convenient time the next day if you have a secure place to store the cash. You will need a place to keep the cash drawer when not in use anyway, so you may want to have a lockable cabinet or safe. Balancing the drawer consists of adding up the cash (less the $200 starting cash), checks and credit card slips and seeing if it equals the day's payments on the report. If it does, the drawer is balanced and the employee places her initials on the report. If it does not balance, the staff member must review every transaction until the error is found, and then make a correction on the daily production report.

Bank deposits

I believe in making each bank deposit exactly equal to one day's receipts. A deposit is made every day and we do not allow the receipts from one day to be added to another day or partial day. This makes it easier to track past deposits if it becomes necessary and the regimental nature discourages theft. If you do not wish to have any funds held in the office overnight you may use a night depository at the bank.

Best wishes for continued success,

Neil B. Gailmard, OD, MBA, FAAO
Chief Optometric Editor, Optometric Management