Cash Handling Policy

The cash handling policy provides guidelines to company employees on the proper and timely handling of company cash in order to be compliant with risks, controls and safety procedures. This policy helps set a standard procedure to be followed by all cash handlers or accountants of an organization.

This policy template is available for download in Word format.

With this Cash Handling Policy Template, You Can:

• Define best practices for cash management
• Bring in efficiency and reduce human error
• Promote integrity in this sensitive functional activity
• Ensure organisational behaviour by following cash management guidelines

In just a few minutes, you will be able to create a cash handling policy. This policy covers rules to be followed with respect to:

• Consequences attached to irregularities noticed
• Responsibility for developing controls for prevention of loss, theft, miscalculation, etc.
• Suspected irregularity involving employees or associates who have a business relationship with the company

Cash Handling Policy

Objective

The objective of the policy is to set the best practices for cash management at < Company Name Here > in order to bring in efficiency, reduce risk or avoid human error.

Scope and Applicability

This policy applies to all employees who handle cash at < Company Name >. This includes but is not limited to < Company Name >’s employees, contractors, consultants and other workers, including all personnel affiliated to external organisations with access to < Company Name >’s cash.

This policy is owned by < Name of the Person > and reachable @ < Contact Number > and < email address >

Policy / Process

• A cash handling policy is a set of rules on how to manage Company cash either within or outside the premises. Cash handling policies focus on safety to reduce cash loss and also help increase efficiency and reduce human error.
• As a daily procedure, available cash in hand must always be under lock and key. The cashier must always be available at the cash counter to safeguard the cash from any theft or fraud.
• No cash should be disbursed or received by the cashier without a formal voucher or document with acknowledgement given or taken.
• This policy mandates a proper maker-checker balance implemented for cash handling.
• The designated cashier and Reporting Manager will form the maker-checker balance
• Cash transactions for the day will be checked and tallied with the cash register by the Reporting Manager for both inward and outward cash movements
• The daily opening and closing balance of physical cash available will be verified and signed off both by the cashier and Reporting Manager at the close of business hours.
• Cash balance must be tallied with individual denominations for easy recording and accuracy.
• Once a physical check of cash available is signed off, the cash box must be stored in a strong room or vault or an immovable safe at the close of business hours.
• Under no circumstances the cash box will be opened post such sign offs, until the next working day.
• Any physical difference of cash with the records must be explained by the cashier or made good immediately. Both the cashier and Reporting Manager will be responsible for any difference in cash balance, which may lead to investigations.
• Any discriminating difference or missing of cash must be reported to HR and Security for verification and further investigations.
• At no point in time, cash in hand should be in excess of <Rupees 100,000/- One lakh> in the cash box. Prompt action must be taken to safely deposit anything in excess of the threshold in the Company’s bank account.
• Where a substantially large volume of cash is being transported, safety precautions such as safety cash box along with at least two trusted employees must accompany the cash box.
• Validity of cash insurance must be ensured by the Finance team to protect the Company against any theft, robbery or cash loss in transit.

Background Checks & Dependability

< Company Name > believes in its employees who are entrusted with handling company cash and expects them to be trustworthy. The Company reserves the right to conduct background checks of the employees as a part of their precautionary audit.

Cash Job Rotation Process

This policy requires a periodical job rotation schedule for the cashier role where an employee should not manage Company cash for a period of more than < xxx months > continuously.

Separate Duties

< Company name here > makes sure that cash management is performed by different people and the duties and responsibilities are segregated. Each task, such as cash handling, verification of closing balance and accounting, is carried out by a different person. This process not only helps prevent human errors but also implements maker-checker balance.

Cash Disbursement & Collection Policy

• Cash is strictly disbursed only for reimbursement to employees who incur any miscellaneous or petty cash expenses but not towards any payroll benefits or allowances. Vendor payments exceeding Rs.5,000/- (Five thousand) by cash are highly discouraged.
• Cash collected from clients or from other sources must be deposited at the bank or with the Company cashier immediately. Company cash collections or withdrawals in excess of Rs.10,000/- (Ten thousand) must be deposited and not be kept in person or carried home or to other places to avoid risk of misplacement, loss or theft.
• If cash cannot be deposited on the same day due to any unavoidable circumstances and has to be carried on person, the employee must take appropriate precautions like avoiding public transport, secluded places or neglecting their bag containing the cash.
• Cash collection duties assigned to employees must be discreet and not discussed with anyone, especially outsiders, to avoid any risks.

Other Cash Handling Rules

Only authorised employees can handle company cash.

• Cash surpluses and deficits should be recorded and accounted for.
• The safe should be used to store all cash in the office.
• Cash drawers should be secured under lock and key when not in use.
• Employees having keys to the cash box or safe including duplicates must be recorded and proper sign offs obtained while handing it over to the next shift
• Two authorised employees should always be present when cash is being counted. Both people need to sign the cash activity sheet acknowledging that the recorded amount was correct.
• When cash is handed off to the next person in the shift, the person accepting the cash should count the cash and accept it by signing the cash activity sheet.
• The cash activity sheet should be kept with the cash and not be taken elsewhere.
• Bank deposit slips should match the cash activity sheet.
• Records should be kept on all cash deposits and payments.
• Cash transactions must be accounted in the books of accounts by end of the day and the closing balance in the books must match the physical cash balance.
• Avoid accepting torn or damaged notes from clients or other sources. However, in the event such notes are inadvertently received, then efforts should be made to exchange them at the designated banks as soon as possible

Special Circumstance and Exception

Any Deviation from this policy has to be approved by the Management. Any changes to the policy have to be approved by Legal and Compliance.

Non-compliance and Consequence

Violation of this policy is subject to disciplinary action, up to and including termination.