Companies invest in a variety of internal control measures to safeguard the company assets and ensure that financial reporting is accurate. Cash represents the most liquid owned by the company and needs the most reliable controls in place. Company management reviews all processes that involve cash handling and identifies the potential risks with those processes. One internal control used with cash handling involves the cash drawer opening. Several advantages exist for companies who control the process of opening the cash drawer.
Cash management involves knowing what level of cash the company holds in financial institutions and onsite. Companies who work directly with customers, such as cashiers, employ onsite cash management techniques. These employees collect cash from customers, pay cash to customers and maintain a level of cash on hand. Onsite cash management safeguards the cash handled by the cashiers.
The opening of the cash drawer provides a fundamental safeguard for onsite cash. The cashier keeps all the cash she's responsible for in the drawer. The company implements specific controls on the cash drawer. These include requiring a password to open the cash drawer or limiting the cash drawer opening to transactions that require cash handling.
One advantage of controlling the opening of a cash drawer involves knowing which employee to hold accountable. This process limits access of who can open the cash drawer. The company assigns each cash drawer to a specific employee. This employee enters a password each time he opens the drawer. Others cannot open the drawer. This holds the employee accountable for all transactions that involve money from the cash drawer.
Another advantage of controlling the cash drawer opening considers the ability to reduce theft. In stores and restaurants, cash drawers sometimes remain unattended. This leaves non-employees and potential thieves access to the cash drawer. When the company implements controls surrounding opening the cash drawer, it limits the ability for potential thieves to access the cash. This reduces the company's risk of being robbed.