Aug 2006 Newsletter

Declarations

What is a declaration?

A declaration (also known as: balancing your cash register, till reconciliation, till/register declaration or cashier settlement) is a key component of your sales audit system where you count the funds in the till/cash drawer and then enter these amounts into the POS computer. The entered amounts are then compared to the system transaction totals (i.e. sales, returns, paid-outs, gift certificates, deposits, etc.).

The amounts that the employee enters should match the transactions that are in the till or Point-of-Sale software. Declarations can be done at the end of a shift or at the end of the day.

A special type of declaration, a blind declaration, is where the system (i.e. expected) amounts are hidden from the individual until they have entered their counted values. Once they have declared their counted values, they cannot change the original entries (they can still make changes as adjustments to the original entries).

The advantage of a blind declaration is that it removes the opportunity for the individual completing the declaration from adjusting the amounts to match the expected amounts. For example, if the person entering the declaration knows that there is $4527.83 of cash expected, but count $4581.52 in cash, they have the opportunity to remove roughly $50 with no paper trail.

In addition, cashiers can enter adjustments after the fact but cannot change the original amounts they entered. For example, a cashier records $249.00 in gift certificates that were redeemed. After they save the declaration, they see that there should be $326.00 in redeemed gift certificates. They then find the missing gift certificates and make the appropriate adjustment.

Why are declarations important?

First and foremost, declarations help reconcile sales and other transactions to your bank deposit. They are used to ensure that the sales made match the money deposited to the bank. Any differences would be recorded as part of your cash over/short.

Another key advantage of doing a declaration is the sense of responsibility that it instills in the cashiers because they know that they are being consistently held accountable.

In addition, declarations are important because of the historical record that they create, which can be used in conjunction with your accounting software.

Finally, it helps to identify patterns of frequent overages or shortages. These patterns may be tied to a specific cashier.

How can I do a declaration?

A declaration takes into account some key pieces of information:

the beginning and ending cash float (the cash float is the cash that is in your cash drawer at the start of the day that is used to make change on cash sales)
amounts to be deposited to the bank (this includes forms of payment such as cash, cheques, credit cards, debit cards, etc.)
amounts not deposited to the bank that affect your accounting system (this includes forms of payment such as gift certificates, gift cards, credit vouchers, coupons, etc.)
the amounts expected from the till or Point-of-Sale software

In most situations, the begin/end float amounts would be the same. So, at the time of declaration, the float amount would be taken out of the cash available; the remaining amount would be the cash that is to be deposited to the bank.

All overages and shortages should be examined. Small discrepancies can be contributed to human error, however, beware of a pattern of small discrepancies. They can be a sign that additional training is needed or theft is taking place.

Timeliness is a crucial element in a sales audit process. The time between when the problem occurs and when it is addressed should be minimized. For example, if a credit card transaction is incorrect, it can be handled and corrected by the credit card company faster if it is addressed sooner rather than later. The same principle is true if there is an issue with an employee.

POSability Declarations

The Declaration feature of POSability is designed to help you reconcile the amounts in your cash drawer at the end of the day or the end of a shift.

It is a “Blind Reconciliation” in that it requires you to enter the values you have counted from the cash drawer before the system tells you what you should have in the drawer (based on transactions that you entered during the day).

To declare your counted cash & other payment media, click once on the Declaration icon.

On the POS Calendar choose the day that you are declaring and click [OK].

To begin, you would usually enter your Starting Float values. You can copy yesterday’s closing float by selecting [Copy Previous] button.

Count out your closing float (i.e. the cash that you will leave in the cash drawer as next day’s float), enter that into the “Float End” column

The remaining cash is your deposit amount; enter the cash amounts that you will deposit into the “Cash Deposit” column.

Next, click the [Enter Other Media] button.

Enter the other payment media values (either counted from the cash drawer or from the Visa Draft Capture batch close report) into the “Declared” column. If you have integrated debit/credit some of the amounts will be entered for you.

Once you’ve entered other media amounts, click the [Click to Declare] button.

You will be prompted to Confirm because once an entry has been declared, the original amounts cannot be modified.

Click [Yes].

POSability will now display the expected amounts and whether or not you are over or short. At this point, you can enter amounts in the adjustments column if necessary. You ideally want the “Expected” and “Final” columns to be the same … if they are it means that you are BALANCED. If not, you will be either Over or Short.

If you wish to make a comment about any adjustments, click the Status Tab and enter notes.

When ready, press the [Click to Complete] button. No other adjustments or edits can be made by you after this point.

You will be asked to confirm, click [OK].

After completing, print the Declaration you can preview the report by choosing [Yes].

To Print the Declaration, click the Print icon on the lower right.

After printing, close the Declaration screen by clicking on the inside ‘X’.

POSability Declarations and ReACT EKG

ReACT EKG is Pulse Retail Systems’ multi-store inventory & sales analysis environment, which also includes an extensive sales audit function which consolidates information from all store locations.

If your company also uses ReACT EKG, declarations that are entered into POSability are transferred into ReACT EKG. This means that head office does not need to wait for the paperwork from the stores.

As shown in the ReACT EKG screen below, head office staff can also make adjustments to the store’s POS declaration.

Once any necessary changes are made, the Finalize box can be checked and the record can be saved. At this point, a number of reports and exports are available.

Please contact Pulse Retail Systems' staff for additional information on ReACT EKG and sales audit processes.