Cash Handling Fundamentals: Transaction Handling and Documentation at the Point of Sale

1) Matching receipts/register entries to cash movement

The goal during live transactions is simple: every change in the drawer must be explained by a register event and supporting documentation. If cash moves but the register does not record it (or the register records it but cash does not move), the drawer will not balance and you will not have a defensible record.

What “aligned” looks like

• Sale paid in cash: register shows a cash tender amount; drawer cash increases by the same amount; receipt exists (printed or digital) with a transaction ID.
• Sale paid by card: register shows card tender; drawer cash does not change; card slip/authorization record matches the transaction ID.
• Refund/void: register shows void/refund event; cash leaves the drawer only if the refund is paid in cash; a manager approval record and reason code exist.
• Paid-out/petty cash: register shows paid-out event; cash leaves the drawer; a paid-out voucher/receipt is attached and signed.

Step-by-step: keep the register and cash synchronized during each sale

1. Ring items first, then take payment. Avoid taking cash “on the side” before the sale is in the register.
2. Confirm the total aloud (or on-screen) before accepting tender.
3. Enter the tender type correctly (cash vs card vs gift card vs split). Do not “force” a tender type to make the register accept the transaction.
4. Handle cash in a consistent sequence: receive cash, place it on the till ledge/above the drawer until change is given, then place bills into the drawer. This helps resolve disputes about what was handed over.
5. Issue the receipt and keep required copies. If your process requires a merchant copy, staple it to the related paperwork (refunds, paid-outs, disputes).
6. Immediately correct mistakes using approved functions (void line item, void transaction, refund) rather than “fixing it later.”

Quick reconciliation habit (micro-check)

After any non-standard event (void, refund, paid-out, cash-back), pause for 5–10 seconds and ask: “Did cash move? Did the register record the same movement? Do I have a document?”

2) Handling split tenders and cash-back procedures

Split tenders (one sale, multiple payment types)

Split tenders are a common source of imbalance because the drawer changes only for the cash portion, while the register records multiple tenders. The documentation must show the breakdown clearly.

Step-by-step: split tender example

Scenario: Total is $37.50. Customer pays $20.00 cash and $17.50 by card.

1. Ring the sale to $37.50.
2. Select Split Tender (or equivalent).
3. Enter Cash = 20.00. The register should show remaining balance $17.50.
4. Process Card = 17.50 and obtain authorization.
5. Receipt should display both tenders and totals. If your system prints a card slip, keep it with the receipt per policy.
6. Drawer impact: cash increases by $20.00 only (no change given in this example).

Common split-tender pitfalls to avoid

• Entering the full amount as cash and then also charging the card (double-collecting).
• Entering the wrong cash amount, then “making it work” by giving extra change.
• Skipping the split function and doing an off-register adjustment.

Cash-back (customer receives cash from the drawer during a card transaction)

Cash-back reduces the drawer even though the sale itself may be card-based. Your register must record cash-back as a distinct component so the drawer reduction is explainable.

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Step-by-step: cash-back example

Scenario: Sale is $12.30. Customer requests $40 cash-back on debit.

1. Ring the sale to $12.30.
2. Select Debit/Cash-back tender.
3. Enter cash-back amount $40.00 when prompted.
4. Confirm the register shows: purchase $12.30 + cash-back $40.00 = total debit $52.30.
5. Dispense $40.00 from the drawer and provide receipt showing cash-back.
6. Drawer impact: cash decreases by $40.00 (even though the sale is not cash).

Control tip

If your system allows it, require a prompt/confirmation screen for cash-back and keep cash-back receipts accessible for end-of-shift review.

3) Managing tips, petty cash, and paid-outs where applicable

Tips (cash tips and card tips)

Tips must be tracked separately from sales revenue. The key is to follow your site’s policy on whether tips are kept in the drawer, dropped into a tip jar, or placed in a sealed envelope.

• Cash tips: If tips are not supposed to remain in the till, do not store them under the tray or mix them with change. Use the designated container and document transfers if required.
• Card tips: Ensure the tip amount is entered exactly as authorized (or adjusted per policy) and that tip adjustments are supported by signed receipts where applicable.

Petty cash (small business expenses)

Petty cash is controlled cash used for minor expenses (e.g., emergency supplies). If your location uses petty cash, it should be separated from the sales drawer or tracked as a distinct fund with its own log. Never “borrow” from the drawer to cover petty cash without recording it as a paid-out or approved transfer.

Paid-outs (cash leaving the drawer for a business purpose)

A paid-out is a documented removal of cash from the drawer (e.g., paying a delivery driver, purchasing emergency supplies, reimbursing a small expense). Paid-outs must be recorded in the register (if available) and supported by a voucher and receipt.

Step-by-step: processing a paid-out

1. Confirm approval (manager authorization if required) and the allowed categories/limits.
2. Create a paid-out voucher before removing cash. Include date/time, amount, purpose, and who received the cash.
3. Record the paid-out in the register using the paid-out function (not as a refund, not as a no-sale).
4. Remove the exact amount from the drawer and hand it to the recipient.
5. Attach the supporting receipt (if the purchase is made immediately) or note “receipt pending” and follow your policy for later attachment.
6. File the voucher in sequence with other shift documents.

What not to do

• Do not use a paid-out to “fix” an overage/shortage.
• Do not remove cash without a voucher because “it’s just a few dollars.”
• Do not record a paid-out as a discount or price override.

4) Writing clear notes for unusual events

Unusual events are where documentation matters most. Your notes should be factual, time-stamped, and tied to a transaction ID or register event number. Avoid opinions, blame, or emotional language.

Note-writing checklist (use for any exception)

• When: date and exact time
• Where: register number/terminal ID
• What: objective description of what happened
• Amount: dollars involved (if any)
• Reference: transaction ID/receipt number, SKU, or batch reference
• Action taken: void/refund performed, manager called, item retained, customer advised
• Who: initials of cashier and approving manager/witness

Customer dispute (example note)

Date/Time: 2026-01-19 14:22  Register: POS-2  Txn: 104587
Event: Customer stated they gave $50 for a $23.18 purchase; register tender recorded $20.
Action: Reviewed cash-on-ledge sequence; no additional bill found. Manager (AB) spoke with customer; no adjustment made.
Cash impact: None. Documents: Receipt attached. Initials: JS / AB

Suspected counterfeit (example note)

Date/Time: 2026-01-19 16:05  Register: POS-1
Event: $100 bill failed verification per store procedure.
Action: Declined bill; requested alternate payment. Customer paid by card. Bill returned to customer.
Cash impact: None. Txn: 104612. Initials: ML

System outage or register malfunction (example note)

Date/Time: 2026-01-19 18:40  Register: POS-3
Event: POS froze after tender selection; receipt did not print.
Action: Manager (KT) approved restart. Checked transaction journal: Txn 104701 completed as card. Reprinted receipt.
Cash impact: None. Documents: Reprint attached. Initials: RD / KT

5) Maintaining a clean audit trail (no informal IOUs, no mixing personal funds)

An audit trail is the chain of evidence showing that every cash movement was authorized, recorded, and supported. Clean audit trails protect the business and the cashier.

Non-negotiable rules

• No informal IOUs: Never leave a note like “took $10, will replace later.” If cash must leave the drawer, it must be a paid-out or approved procedure.
• No mixing personal funds: Do not add your own money to “fix” a shortage or remove money to “fix” an overage. Report discrepancies through the approved process.
• No off-register transactions: Every sale, refund, discount, and cash movement must be rung through the POS using the correct function.
• No backdating: Document events at the time they occur. If you must write later, note the actual event time and the note time.
• One event, one set of documents: Keep receipts, vouchers, approvals, and notes together and referenced by transaction ID.

Document handling habits that strengthen auditability

• Staple related items: refund receipt + original receipt (if available) + manager approval slip + note.
• Use consistent reason codes: choose the closest approved reason (e.g., “Customer return,” “Duplicate charge,” “Price error”).
• Keep sequence: file paperwork in chronological order by transaction number or time.
• Limit “no sale” openings: if your system tracks them, ensure each is justified (e.g., making change) and follows policy.

6) Practice activity: complete sample paperwork for a void/refund and a paid-out

Use the templates below to practice writing complete, audit-ready documentation. Fill in every field; if something is unknown, write “Unknown” and explain why in the notes rather than leaving it blank.

Practice A: Void/Refund paperwork (sample form)

Scenario: Customer returns one item from a purchase made earlier today. Original payment was cash. Refund is issued in cash. Manager approval required.

Practice B: Paid-out voucher (sample form)

Scenario: Emergency purchase of cleaning supplies from a nearby store. Cash paid from the drawer. Receipt will be returned and attached.

Self-check questions (use after completing both forms)

• Does each form reference a register event or transaction ID that would appear in the POS journal?
• Is the cash movement explicitly stated (cash removed/added and exact amount)?
• Is there an approval name/initials where required?
• Would someone who was not present understand what happened from the paperwork alone?