End-of-day cash closing

End-of-day cash closing

End-of-day cash closing is the process of reconciling all cash transactions for the day, verifying that the physical cash on hand matches the recorded amount, and documenting the day's cash activity. This task is critical for maintaining accurate records and detecting discrepancies early.

Before you start

• The business day has ended and all cash-related transactions (sales, receipts, payments, refunds) have been entered.
• You have the cash register receipt, POS summary, or bank deposit slip showing total cash received.
• You have access to the transactions list and journal entries in the system.
• You know where the cash is stored and can physically verify the amount.

Steps

1. Gather all cash-related documents for the day

Collect:

• Cash register or POS receipts (total cash sales for the day)
• Bank deposit slips or payment receipts
• Any refund or adjustment slips
• Petty cash reimbursement receipts
• Customer payments received in cash

2. Count the physical cash on hand

Physically count all cash in the cash box, register, or safe. Organize by currency and denomination. Record the total.

3. Reconcile cash recorded in the system

Go to Transactions Open in Usystems and filter by today's date. Review:

• Cash sales (from invoices, sales receipts, or POS)
• Cash payments received (customer advance payments)
• Petty cash reimbursements
• Refunds or adjustments in cash

Add up all cash-in and cash-out amounts for the day.

4. Compare physical count to system records

Compare the physical count (Step 2) to the total from the system (Step 3).

• If they match: proceed to Step 5.
• If there is a discrepancy:
  • Recount the physical cash carefully.
  • Review the system entries for errors (wrong amounts, duplicate entries, missing entries).
  • Check for unrecorded transactions (e.g., a customer paid cash but the receipt was not entered).
  • Document the difference. Small discrepancies (under 100 AFN) may be due to rounding; larger ones should be investigated and noted.

5. Record an end-of-day closing entry (if required)

Some businesses record a summary journal entry at day end to consolidate all cash transactions. Check with your accounting manager about your company's policy.

If a closing entry is required:

1. Go to Transactions Open in Usystems and create a new journal entry.

2. Title it "Daily Cash Closing – [Date]".

3. Enter a line for each cash account you use (main cash account, petty cash, register, etc.) showing the day's net activity.

4. Save the entry.

6. Prepare the cash for deposit or storage

• Count and bundle the cash.
• Prepare a bank deposit slip if you will deposit cash into the bank.
• Store the cash securely (safe, lockbox, or bank deposit).
• Keep the bank deposit receipt for reconciliation.

7. Document the closing

Record in a log or memo:

• Date and time of closing
• Physical cash count
• System record total
• Any discrepancies and explanation
• Who performed the closing
• Where the cash is stored

This log is useful for audits and for tracking patterns over time.

Accounting impact

End-of-day closing does not itself create an accounting entry unless you record a summary journal entry (Step 5). However, the daily cash transactions (sales, refunds, payments) are individually recorded as they occur throughout the day. The closing process is a reconciliation checkpoint that ensures accuracy.

Tips & common mistakes

• Close the cash register at the exact end of the business day—not early, not late. This ensures that cash closing corresponds to the actual business day.
• Count cash carefully and at least twice. Small counting errors can compound over time.
• Use a standardized format for the end-of-day log. Consistency makes it easier to spot trends and discrepancies.
• Investigate all discrepancies promptly. A 500 AFN variance on Day 1 that is not tracked can hide a 5,000 AFN variance by Day 10.
• Assign one person to close the register if possible. Multiple closers increase the risk of confusion and error.
• Keep the end-of-day log as an audit trail. Your auditor will ask to review daily closing logs to verify cash controls.
• Deposit cash promptly. Do not let large cash balances sit overnight. The longer cash sits undeposited, the greater the risk of loss or theft.