What is a cash reconciliation?

A cash reconciliation is the process of verifying the amount of cash in a cash register as of the close of business. The procedure to follow for this cash reconciliation is as follows:

1. Obtain a daily reconciliation form on which to document the cash reconciliation.
2. List on the form the amount of beginning cash in the cash drawer, which may be broken down by individual type of bill and coin.
3. Close out the cash register.
4. List on the daily reconciliation form all cash collected, which may be broken down by individual type of bill and coin.
5. Using individual cash and receipts in the cash register, summarize on the form the amount of receipts by cash, check, coupon, and credit cards.
6. Using the cash register tape, summarize on the form the amount of gross sales, voided sales, and sales returns to arrive at a net sales figure.
7. Using the cash register tape, summarize on the form the amount of receipts by cash, check, coupon, and credit card.
8. Compare the totals on the form for cash, checks, coupons, and credit card receipts that are based on individual receipts and that are based on the cash register.
9. Reconcile the differences between the two columns.
10. Sign and date the form, and submit to a supervisor for review.
11. The supervisor reviews the reconciliation form, as well as any explanations for discrepancies, and approves the form if he or she agrees with it.

A sample of the reconciliation portion of the daily cash reconciliation form is shown below.

Cash Reconciliation Form

	Money Collected by Type			Sales Recorded by Type		Difference + (over) / - (short)
Cash collected	$515.00		Cash sales	$518.00		-$3.00
Checks collected	84.50		Check sales	78.00		+6.50
Credit cards collected	308.20		Credit card sales	308.20		0
Coupons collected	0		Coupon sales	1.50		-1.50
Total collected	$907.70		Total recorded	$905.70		+$2.00

A cash reconciliation is not the same as a bank reconciliation, where you match the period-end bank account statement provided by your bank with your internal records for the same account, and adjust your internal records as necessary.

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