In short: A cash variance is the gap between the cash the software expects in the drawer and the cash actually counted: a shortage if it is less, an overage if it is more.
The full guide: Daily cash control
Work it out now: Cash count
A cash variance is the gap between expected and actual cash. The software works out the expected figure: the opening float, plus cash sales, minus cash refunds, expenses and money moved to the safe. The actual figure is what you count. If actual is lower, it is a shortage. If it is higher, it is an overage. Both need an explanation, even the overage.
In Jordanian shops, most small variances come from change: half a dinar handed back by mistake, a coin on the floor. Bigger ones usually come from a card sale recorded as cash, an expense paid from the drawer and never entered, or a refund that was not recorded. Review the transactions before blaming anyone, because most variances are recording errors, not theft.
What causes shortages and overages
| Case | Common causes |
|---|---|
| Shortage | Too much change given, an expense paid from the drawer and not recorded, a card sale entered as cash, a cash refund never entered |
| Overage | A customer overpaid, a sale not recorded, a cash debt payment not entered, a cash sale entered as card |
How to handle variances
Agree in advance on an acceptable limit, such as half a dinar, and on what happens when a cashier goes over it. Log every variance by employee and shift, because a small variance that keeps repeating from the same person tells you more than one big one.
In Ghalleh the cashier counts the drawer at closing by tapping each note and coin, any difference shows at once, and the owner is notified with the amount and the employee.
A shop example
A cashier at a vegetable shop in Russeifa closes the shift. The software expects JOD 96.250 and the count shows JOD 91.250: a 5 dinar shortage. Reviewing the day reveals a 5 dinar delivery charge paid from the drawer and never entered. Once it is recorded, the variance disappears.
Common questions
Is an overage in the till a good thing?
Not really. It usually means a change mistake or a sale that was not recorded properly, and it needs an explanation just like a shortage.
How do I reduce cash variances?
Give every cashier their own login, record every expense paid from the drawer, count by denomination, and review variances weekly by employee.