Streamlining Cash Handling: A Proven System for Bar Owners to Prevent Errors & Discrepancies

Struggling with cash discrepancies in your bar’s daily operations?

Cash handling errors can cost your business money and peace of mind. Without a reliable system in place, you risk mismanagement and missed opportunities to identify problems early.

In today's episode:

• Learn a proven, easy-to-use system for daily cash counts that minimizes errors.
• Discover how to create checks and balances to protect your bar from theft and discrepancies.
• Implement a simple Excel-based form to streamline your reconciliation process and keep all records organized.

Stop cash-handling headaches today—listen now and secure your bar’s financial health with this essential system!

Learn More:
Email Chris
Schedule a Strategy Session
Bar Business Nation Facebook Group
The Bar Business Podcast Website
Chris' Book 'How to Make Top-Shelf Profits in the Bar Business'

Thank you to our show sponsors, SpotOn and Starfish. SpotOn's modern, cloud-based POS system allows bars to increase team productivity and provides the reporting you need to make smart financial decisions. Starfish works with your bookkeeping software using AI to help you make data-driven decisions and maximize your profits while giving you benchmarking data to understand how you compare to the industry at large.
**We are a SpotOn affiliate and earn commissions from the link above.

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Transcript

Chris Schneider (00:01.112)
Today we're going to dive into a single system that I have always used for myself and all of my clients to simplify your cash count every morning and ensure that your cash is always exactly where it should be.

As I mentioned, today we are talking all about cash management. And just to give you a little bit of background, because this is where this came from, was the Facebook group Bar Business Nation that I run. This was a conversation that came up this week, or I should say last week, and a lot of people were getting involved. And it started out with just a simple question of looking for help with cash handling tips.

And then as we refine that question down and talked within the group.

really what we got down to is how do you properly put a system in place that is going to allow you not to have to count your money every morning, but also provides checks and balances? And so my favorite way to do that is what I have always called a cash to account for form. And I make this form up in Excel. I've had them for myself. I've had them for clients. And it's a very simple form.

and it essentially has three sections. And I always did these as half sheets because it made life easier and it saved me on paper. So you could do it as a full sheet of paper or a half sheet of paper. It just depends on how you want to do it. Now, a cash to account for form is very simple and it has three sections to the form. Section A is your petty cash count. Section B is your safe count. And Section C is your money reconciliation for your deposit.

Chris Schneider (01:54.67)
So in section A and B, we're talking count for petty cash and count for the safe. The way I always laid those out was a grid where it didn't say, you know, what's the total amount of money and you just plug in a number because that's A is too easy and B it doesn't give you great information. I would always have, you know, pennies, dime, nickels, dimes or one, one cent, five cents, ten cents, twenty five cents.

$1. So whatever types of currency I have, would list out on that form. And then next to that, so if it said $1 and you had $200, $1 bells in the safe, you would just put next to the $1 space, $200. Now I did this for two reasons for both petty cash and the safe. A, it was a signal to me just looking at the form without opening the safe, hey, do I need to go to the bank and get change?

Because if I pulled that up and I saw that we had a bunch of 20s and no quarters, OK, I need to go to the bank and buy quarters. But if I looked at the form and it said, well, we have tons of change and we have tons of one and $5 bills and not many large bills, OK, I don't need to go to the bank today for that. I might need to go for a deposit or something else, but I don't need to worry about a change order with the bank. The other thing it does in making someone write down, hey, this is how many $1 bills we have. This is how many $5 bills we have.

you're putting in more controls. It's a lot harder. I mean, it's not really harder, but it is psychologically harder for someone to fake those numbers rather than actually do the count. And it makes people pay more attention. So that was the first two sections. So that's how I would lay out the safe section. That's how I lay out the petty cash system section. And then you have the essentially bank deposit calculation. And depending on your

bar and what you do, this may be more or less complex. So for instance, if you have a separate drawer for gambling, if you have pull tabs or Keno or slot machines or anything like that, and you're responsible for a separate drawer, that's going to add some complexity. If you only have one shift, then there's only one drawer in a day. But if you have two shifts, maybe you have the same drawer for both shifts or two drawers.

Chris Schneider (04:19.574)
I always like to have a different drawer for each shift, but that's just me because I'm a little weird. But essentially, the other half of the form, the section of the form that was laying out the deposit and everything would go like this. So we'd start with, what is the starting drawer? So if your drawer is $1,000, starting drawer and just have a blank and then you would write in $1,000. Then you'll have a line to subtract your tip outs if they were paid out of the drawer.

You'd have a line to subtract your paid outs if you had any paid outs paid out of the drawer, because obviously that's cash that isn't there. Then normally you would add back in paid ins. That doesn't happen very often, but I always had a line for it just in case. And then finally the bartender deposit, because what the bartender owed the house at the end of the night normally stayed in our cash drawer. So starting drawer, whatever that is, say $1000, minus your tips paid out, minus your other paid outs.

plus your paid ends, plus the deposit that the bartender owns on their sales for that night. And then you would do that math and it would give you the expected ending drawer total. So then you go to the drawer and you count it. Do these two numbers match? If so, great.

Now we need to reset that drawer for a starting drawer. then there'd be just a few lines under that that said expected drawer ending total. So that number that we just calculated, whatever that may be. Minus the starting drawer. So if my drawer should be a thousand bucks and in the drawer with the paid outs and tips accounted for and the bartender deposit, say it's $1,256.35, then

I would take that $12.3556, subtract the thousand, that leaves me with $2.3556, so $235.56 should be what's in my bank deposit for the day. Then to make this even more double-checked, if you will, I would take that cash-to-account form that the manager filled out, I would staple that to the Z for the day, I would staple to it any paid-outs for the day, I would staple to it my

Chris Schneider (06:35.028)
Server reports for the day. So by the time I'm done with that day's financial cash to account for form, all the supporting documentation, all of the manual account, everything is recorded, stapled into one thing, and then would file it in a drawer. So if I ever had a question, it was easy and quick to refer to. I knew that we had systems in place that prevented theft of cash and

I had a record if there was ever a question about anything on a specific day, I could just go pull that day and I have all the financial information for that day in one place, easily accessible with checks and balances involved.