Cash Sales Control Basics

Cash is the easiest thing in a business to lose track of. Unlike card sales, there is no bank record created at the moment of sale, so if cash goes missing between the till and the bank, it can vanish without a trace. That gap is exactly where theft, honest mistakes and messy records all hide.

Good cash controls are not about distrusting your staff. They are about building a routine where errors surface quickly and everyone is protected, including you.

Why cash businesses get extra attention

The ATO publishes small business benchmarks that compare reported income and expenses against similar businesses in the same industry. Businesses reporting figures well outside those ranges, particularly cash-heavy ones like cafes, salons and trades, are more likely to be reviewed. Solid daily records are your best protection, because they let you explain your numbers with evidence rather than memory.

Reconcile the till every day

The core habit is simple: at the end of each trading day, count the cash and compare it to what the register says you took.

• Run the end-of-day settlement or z-report from your register or point-of-sale system
• Count the drawer, deduct the opening float, and compare the result to the report
• Record any difference, even small ones, in an over-and-short log
• Have the person counting sign off, and investigate repeated discrepancies

Small daily differences are normal. What matters is that they are recorded, visible and staying small, not quietly growing.

Bank your takings intact

Deposit the full day's takings and avoid paying suppliers, wages or personal expenses straight from the till. When cash expenses come out of the drawer, your sales records understate income and your expense records lose their receipts, which makes the books unreliable and hard to defend in a review. If you must pay something in cash, use a petty cash float with proper vouchers instead.

Separate duties where you can

In an ideal setup, the person who takes the cash is not the same person who counts it, records it and banks it. Most small businesses cannot fully separate these roles, so aim for partial safeguards: rotate who does the count, have the owner review the over-and-short log regularly, and compare banked amounts to register totals each month.

Use the numbers, not just file them

Daily reconciliation gives you more than compliance. Track takings by day of the week and watch how cash sales move as a share of total sales. A slow slide in cash takings while card sales hold steady is a classic warning sign worth investigating.

Keep the records

Keep your z-reports, deposit slips and reconciliation sheets with your other business records. The ATO generally expects business records to be kept for five years, and daily till records are exactly what you will want on hand if your figures are ever questioned.

What is a z-report?

It is the end-of-day settlement report from your register or point-of-sale system, showing total sales for the day. It is the independent figure you count your drawer against, so keep them all.

What happens if my business falls outside the ATO benchmarks?

It does not automatically mean trouble, but it can increase the chance of an ATO review. Good daily records let you explain a genuine difference, such as a different business model or local conditions.

Can I pay staff wages in cash?

You can, but the wages must still go through payroll, be reported through Single Touch Payroll and have tax withheld as normal. Paying wages from the till without records creates problems for both you and the employee.