End-of-day cash reconciliation for small business
End-of-day cash reconciliation means proving that the cash counted, the card batch and the bank deposit each match what the point-of-sale system says was sold that day. Per register it needs four numbers: POS cash sales, paid-outs, counted cash and the float you keep back.
The four checks
| Check | Compare | When |
|---|---|---|
| 1. Drawer | Counted cash vs float + POS cash sales − paid-outs | At close, per register |
| 2. Cards | POS card total vs card processor batch report | At close, after the batch settles |
| 3. Deposit | Deposit slip vs sum of (counted cash − float) for all registers | Before the bag is sealed |
| 4. Bank | Amount the bank posts vs deposit slip | When the deposit shows on the bank statement |
Worked example: two registers
| Register 1 | Register 2 | Store | |
|---|---|---|---|
| Float | $200.00 | $150.00 | $350.00 |
| POS cash sales | $842.10 | $391.60 | $1,233.70 |
| Paid-outs (with slips) | $25.00 | $0.00 | $25.00 |
| Expected cash | $1,017.10 | $541.60 | $1,558.70 |
| Counted cash | $1,015.35 | $542.10 | $1,557.45 |
| Over/short | −$1.75 | +$0.50 | −$1.25 |
| Deposit (counted − float) | $815.35 | $392.10 | $1,207.45 |
Example math: Register 1 expects 200.00 + 842.10 − 25.00 = $1,017.10 and counts $1,015.35, so it is $1.75 short. Register 2 expects 150.00 + 391.60 = $541.60 and counts $542.10, so it is $0.50 over. The deposit is 815.35 + 392.10 = $1,207.45. Cross-check: store cash sales minus paid-outs is 1,233.70 − 25.00 = $1,208.70, and 1,207.45 − 1,208.70 = −$1.25, the same as the two drawer variances added together. If those two figures disagree, a number was copied wrong.
Cards: the POS shows $2,310.40 in card sales and the processor batch shows $2,310.40. They match, so no card sale was keyed as cash or the reverse.
Reconciliation sheet template
| Line | Field | Amount / initials |
|---|---|---|
| 1 | Date, store, closer | |
| 2 | POS cash sales (all registers) | |
| 3 | Paid-outs with slips attached | |
| 4 | Total floats | |
| 5 | Expected cash (4 + 2 − 3) | |
| 6 | Counted cash (all registers) | |
| 7 | Over/short (6 − 5) | |
| 8 | Deposit (6 − 4) | |
| 9 | POS card total / processor batch total | |
| 10 | Card difference (should be 0.00) | |
| 11 | Deposit bag number | |
| 12 | Counted by / verified by | |
| 13 | Bank posting date and amount (filled in later) |
Order of work at close
- Lock the doors and end sales on every register.
- Count each drawer before looking at the POS report if you use a blind count; the steps are in how to count a cash drawer.
- Run the end-of-day POS report and settle the card batch.
- Fill lines 2–10 of the sheet. Investigate any variance above your written threshold before leaving.
- Bag the deposit with a copy of the sheet; put floats in the safe.
- When the deposit posts at the bank, fill line 13.
When the numbers don't match
| Mismatch | Check first |
|---|---|
| Drawer short by a round amount | Paid-out or cash drop with no slip |
| Cash over and cards short by the same amount | A card sale rung as cash |
| Deposit slip ≠ counted − float | Float left in the deposit, or pulled twice |
| Bank posting ≠ deposit slip | The bank's adjustment notice; keep the bag receipt |
Records and the IRS
The IRS lists cash register tapes and deposit information (cash and credit sales) among the documents that support gross receipts. It says to keep records for 3 years in the basic case, longer in specific cases such as unreported income, and employment tax records for at least 4 years. Keep the reconciliation sheet with the tape.
A separate rule applies to single large cash payments: the IRS Form 8300 guide says a business must file Form 8300 when it receives more than $10,000 in cash in a reportable transaction, within 15 days of receiving it.
For a multi-store owner, Assistlify keeps each location's cash-drawer counts in one place, which covers check 1; the card and bank checks still come from your processor and bank.
Questions
What is end-of-day reconciliation in retail?
It is checking that counted cash equals float plus cash sales minus paid-outs, that card totals match the processor batch, and that the deposit equals counted cash minus the float.
Should my bank deposit equal my cash sales?
It should equal cash sales minus paid-outs plus or minus the drawer variance; in the example, $1,208.70 − $1.25 = $1,207.45.
How long should I keep register tapes and cash reports?
The IRS says keep records 3 years in the basic case and employment tax records at least 4 years; register tapes and deposit records are listed as gross-receipts documents.
When do I have to report a large cash payment?
The IRS says file Form 8300 when you receive more than $10,000 in cash in a reportable transaction, within 15 days.
Sources
- IRS: What kind of records should I keep (checked 2026-11-12)
- IRS: How long should I keep records? (checked 2026-11-12)
- IRS Form 8300 reference guide (checked 2026-11-12)