How to reconcile your collectors' cash
By Equipo Prestafolio
The daily cash count step by step, the six recurring discrepancies, and the rules that prevent them before they happen.
Reconciling the cash is a subtraction: opening float + collections − disbursements − expenses = the cash the collector must hand in. If what they have in hand matches that figure, the till balances. If not, you have a discrepancy, and a discrepancy always has an explanation. The problem is that if you do not do the count the same day, that explanation is lost forever.
The reconciliation formula
Item | Sign |
|---|---|
Opening float (the cash they left with) | |
Collections for the day | |
Disbursements made on the street | − |
Expenses paid out of the till (transport, fuel) | − |
= Expected cash |
|
Cash actually counted |
|
= Difference (positive: over; negative: short) |
|
A reconciliation with numbers
A collector leaves with a float of 2,000 for change. At the end of the day:
Item | Amount |
|---|---|
Opening float | 2,000 |
Collections recorded (23 payments) | +47,500 |
Arrears collected | +1,200 |
Disbursement of a new loan | −15,000 |
Transport paid out of the till | −600 |
Expected cash | 35,100 |
Cash counted | 34,700 |
Difference | −400 |
400 short. And this is where it is decided whether you have a system or an argument: with the count done today, the collector remembers that the client on instalment 12 paid 400 less "and will bring it tomorrow". With the count done on Friday, nobody remembers anything and those 400 become "things that happen".
The same six discrepancies, always
Discrepancy | What causes it | Symptom |
|---|---|---|
Unrecorded collection | The collector took the money and did not log it | Cash over |
Part-payment logged as a full instalment | 5,000 was recorded and 3,000 came in | Cash short |
Arrears collected but not recorded | More came in than the system says | Cash over |
Disbursement without a receipt | Money went out with no backing | Cash short |
Expense paid out of the till | Transport, food, phone credit | Cash short |
Same payment logged twice | Recorded again after the signal came back | Cash short (apparently) |
Notice an uncomfortable pattern: cash that is over is just as serious as cash that is short. If 300 is over, that is not good news: it means there is money circulating that your system does not know about, and an unrecorded collection is a client whose payment was never credited. Tomorrow that client turns up with a receipt and you have a serious trust problem.
The seven rules that prevent discrepancies
1. A fixed, known float. The collector always leaves with the same float (2,000, 5,000, whatever) and that figure does not change day to day. A variable float makes the next day's count impossible.
2. Recording happens at the moment of collection, not at the end of the day. Writing things down from memory at six in the evening is not a record, it is a reconstruction. And reconstructions always balance: because whoever makes them adjusts until they do.
3. One movement per transaction, never netted. You do not net a collection against a disbursement. If they collected 5,000 and disbursed 3,000, that is two movements, not one of 2,000.
4. Expenses only leave the till with a receipt. Fuel, transport, anything: no receipt, no expense, and the cash is short. No exceptions, not even the small ones: especially not the small ones.
5. A fixed cut-off time. The cash day ends at a set hour, not "whenever they get in". A payment that arrives after the cut-off belongs to the next day. Without a cut-off, the same payment can be counted on two days or on none.
6. Whoever collects does not adjust. The person who receives the cash cannot be the same one who corrects the figures when they do not add up. It is the most basic separation of duties there is, and the one most often skipped in small operations: precisely where it hurts most.
7. A declared tolerance and a written policy. Decide in advance what difference counts as acceptable (rounding, change) and what happens above it. Without a written policy, every discrepancy is a negotiation, and repeated negotiations become habit.
Bank the cash every day
Cash sleeping at somebody's house is not an accounting matter, it is a safety matter, yours and your collector's. Bank or take in the cash on the same day as the cut-off. Beyond the obvious risk, accumulated cash makes the next day's count impossible: you no longer know which part is today's.
A discrepancy is not always theft
It is important to say so, because the instinctive reaction is the worst one: the vast majority of discrepancies are errors, not fraud. Change given wrong, a payment logged against the wrong client, a note left in the other pocket.
What a good cash system does is not catch thieves: it removes ambiguity. When the count is daily and every movement carries its timestamp and its author, the error surfaces the same day, gets fixed, and does not come back. And fraud, if it existed, is left with nowhere to hide, which is a far more effective prevention than suspicion.
What to look at every week
Indicator | What it tells you |
|---|---|
Discrepancies per collector | If one person accounts for all of them, it is not bad luck |
Discrepancies by weekday | Fridays are usually the worst. There is a cause there |
Collections logged outside route hours | Late logging = unreliable logging |
Till expenses with no receipt | It should be zero. If it is not, you know where the money goes |
Days without a count | The most important indicator. It should be zero |
The last one is the only one that really matters: a day without a count is a day without truth. You do not get it back later.
Summary
- Reconciliation = float + collections − disbursements − expenses, against the counted cash.
- It is done every day, per collector, at a fixed cut-off time.
- Cash that is over is just as serious as cash that is short.
- Whoever collects does not adjust. Separation of duties, even with only two people.
- The goal is not to catch anyone: it is for the error to surface the same day.
Prestafolio runs a till per collector: opened with its float, every collection and disbursement recorded with its author and timestamp, and a close that compares the expected cash against what is actually counted. See Cash till per collector, Cash counts and movements and Collector performance.