Cash drawer reconciliation: explain the closing difference

Expected closing cash is the opening float plus cash sales and other cash paid in, less refunds, paid-outs and money removed. Count what is physically in the drawer and compare it with that expectation. Investigate the difference before correcting the records; a shortage on the first count doesn't tell you who or what caused it.

Use this sheet for the trading till. A petty-cash float used to pay expenses is a separate record, even if both involve notes and coins.

Define the drawer and the shift

Record the drawer, trading period and person counting. Use the opening float actually counted, not a habitual amount copied from yesterday. Pause transactions while counting or record the exact boundary so another sale doesn't slip between the report and the count.

Square's cash-drawer guidance distinguishes expected cash from the actual close and records cash paid in or out separately from sales. Whatever system you use, a drawer marked ended isn't evidence of a physical count by itself.

Movement	Amount	Running expectation
Opening float	+$200	$200
Cash sales, after change	+$860	$1,060
Cash refunds	-$40	$1,020
Paid-out with receipt	-$25	$995
Removed to safe	-$500	$495
Physically counted	$485	Difference: -$10

Fictional example in AUD. Replace these inputs with your own records.

The sales figure is cash retained for sales, not all notes handed over before giving change. The $500 safe removal must have its own record; otherwise it looks like missing money at closing time.

Count by denomination

Use quantity times denomination and add each subtotal. Keep coins and notes visible on the sheet. A fictional $485 count could be six $50 notes, five $20 notes, five $10 notes, four $5 notes and $15 in counted coins. That is $300 + $100 + $50 + $20 + $15.

Count the coins individually on the actual worksheet. If a second person checks the drawer, have them count without being told the expected total first. Record both counts if they differ.

Investigate the $10 difference

Recount first. Then check the shift boundary, opening float, cash/card tender selection, refunds, safe removals and paid-out receipts. Look for a $10 entry as a useful lead, but don't assume one transaction caused the entire variance.

Suppose a verified $10 paid-out was omitted from the fictional worksheet. Adding that supported movement changes expected cash to $485 and resolves the difference. Keep the original sheet, receipt and correction reference. If there is no evidence, leave the $10 unresolved with an investigation owner instead of inventing a balancing expense.

Separate tomorrow's float from today's banking

Once the count is agreed, record how much stays in the till and how much goes to the safe or bank. A counted $485 with a $200 next-day float leaves $285 to move, alongside the earlier $500 removal. Trace both movements so neither is counted twice as takings.

For mixed payments, use the split-tender example to put only the cash part into the drawer total. The bookkeeping routine connects the close to the wider records; the location register helps when several tills report together.

Key takeaways

• Reconcile every movement, including safe drops and paid-outs.
• Preserve the physical denomination count and the original difference.
• Correct supported errors and assign unresolved differences for follow-up.

Where to get help

• Square: cash drawer sessions