Recently I was working with a rather large company with multiple locations. Strengthening the controls over cash deposits and available cash was the goal. The timing of actual cash deposits varied since the company accepts cash, credit cards, third party financing and  sales on credit. Reports were developed to clearly account for all sales daily and the deposit of cash daily. We then refined our controls.

The key objective was to measure and report available cash. This is cash in the bank  that is available for disbursement. Many companies do not measure this number daily and  if they do it is often measured incorrectly. The number one mistake is to ignore some or all of the disbursements that have been made that have not cleared the  bank. Another mistake is to assume all cash is deposited when due. For example, deposits from credit card sales generally take approximately three days to be recorded in the bank. Deposits made from a remote  location are often made using night depository, Those deposits are physically in the bank but often are not visible using on - line banking until the second day after the night deposit.  All of these timing differences must be taken into account in calculation available.

All the best,

Steve Pohlit, President

Exec Net Consulting

The Profit System