Closing the day

Seven in the evening. The lorries are back, the counter has stopped serving, and Nimal, who owns Riverbank Distributors (a sample business), has one job left before he goes home: make sure the money in the drawer matches what the system says should be there, then close the day so nobody can quietly change it overnight.

A distributor's day is not like a shop's. Most of the value goes out on account to shops that will pay in thirty days, while the cash drawer handles a smaller stream of counter sales and payments brought in by shop owners. The close needs to show both, and the cash count needs to ignore the credit.

What does the close the day screen show?

It shows three columns side by side: what the system recorded, the cash in the drawer, and a short review before closing. Here are the sample figures for the day:

The working is simple: 10,000 + 286,400 + 412,000 − 8,600 = Rs 699,800. Nimal counted Rs 699,200, so the drawer is Rs 600 short.

Step by step

1. Open close the day. At 19:00 Nimal opens Close the day. The top of the screen brings today's sales in cash and on account together, so he starts with the whole picture, not just the drawer.
2. Read what the system recorded. The left column lists cash sales, card sales, sales on account, payments taken in, cash paid out and the float, and ends with the cash expected. He reads it once before counting so he knows roughly what to look for. On a day with Rs 11 lakh on credit and under Rs 3 lakh in cash sales, he is not surprised the drawer looks small next to the sales total.
3. Count the drawer and type it in. He counts notes and coins and types Rs 699,200 under counted. Expected sits beside it at Rs 699,800.
4. See the difference in words. The difference shows as − Rs 600 with a label reading Short, add a note. There is no need to work it out on a calculator, and no chance of misreading a minus sign.
5. Write the reason. Nimal checks with Dilshan on the counter. Change was given twice to one customer during a busy spell. He writes exactly that in the note: change given twice at the counter, checked with Dilshan. A small short with a clear reason is normal; an unexplained one, repeated, is a pattern.
6. Run down the review list. The right column lists sales total, cash collected, card payments, credit sales and expenses, each marked checked. It is a short final look so that a mistyped expense or a payment entered twice is caught now, not at month end.
7. Close the day. He presses Close the day. The line under the button says what happens next: after closing, today's sales are locked.
8. Know that it stays closed. If something genuinely needs correcting tomorrow, only an owner can reopen the day, and the reason is logged. Staff cannot edit yesterday's sales to hide a mistake.

Why lock the day at all?

Because a day that can be changed later cannot be trusted. If a sale can be deleted or a payment moved after the cash has been counted, the count stops meaning anything. Locking gives three things:

• A fixed record. The figures Nimal saw at 19:00 are the figures his accountant sees later.
• Clear responsibility. Reopening needs an owner and a reason, so changes are rare and explained.
• Honest shorts and overs. Staff know a difference will be noted, not hidden, which tends to make the counter more careful.

The general method, with a printable checklist, is in the end-of-day cash up guide.

How is a distributor's close different from a shop's?

The main difference is the size of the credit line. In a corner shop, credit is a few names in a book; at a distributor it can be almost four times the cash taken in a day. That has two effects on the close. First, the cash drawer is only a slice of the business, so a balanced drawer does not mean a good day. Second, payments brought in by shop owners can be larger than the day's cash sales, as they are in the sample (Rs 412,000 against Rs 286,400). Missing one of those payments from the count would show as a very large short, which is why recording each payment against its invoice as it arrives matters so much.

Tips for distributors

• Count before you look at expected. If possible, have the count done before reading the expected figure, so the number on screen cannot steer the count.
• Bank cheques and cash separately. Payments taken in may include cheques from shops. Keep them apart from notes when counting, so the drawer total is not confused by a cheque in the wrong pile.
• Watch credit sales, not just cash. Rs 11.2 lakh on account in one day is fine if shops pay. Compare it with what the money owed screen says about how late they already are.
• Keep the float the same every day. Rs 10,000 every morning makes the float easy to check and any difference easy to spot.

Common mistakes

• Leaving cash paid out unrecorded. A lorry diesel top-up or tea for the loaders paid from the drawer, but not recorded, shows up as a short. Record it when it happens.
• Counting rep collections that were never handed in. If a rep still has a shop's cash in his bag, it is not in the drawer yet. Hand it in first, or count it the next day.
• Writing "unknown" as the note. Ask the person on the counter while it is fresh. A note that names a cause and a person is far more useful later.
• Reopening days to tidy up. If an owner reopens days often, the lock stops protecting anything. Fix errors with a correction on the next day where you can.

What to do next

The close is the last stop in the distributor's day. To see where the cash and credit came from, go back to shops that owe, oldest first and deliveries on the road.

For the bigger picture of how cash and credit move through a business, read cash flow for small business. If credit sales are growing faster than collections, customer credit for wholesalers explains how to set limits and terms that keep the drawer healthy.