A retail store accountant closes the day with four tasks: cash reconciliation, POS settlement, inventory check, and VAT recording.
💡 1-Cash reconciliation: Count all notes and coins by denomination. Print POS settlement receipts from every card machine — only after the last transaction. Add petty cash expenses from the ledger. Compare the total against your sales software. Match means you’re done. No match means investigate before closing.
💡 2-Cash short: Usually caused by small customer discounts, busy-hour collection errors, or a POS receipt printed too early. Rarely — theft. Always tell your manager. Never cover it yourself. Cash over? Report it honestly to the owner. It may belong to a customer who overpaid.
💡 3-Inventory: Physically verify every delivery before entering it into software. When physical stock and software don’t match, find the reason first — missed entries, damaged goods, or shoplifting. Never adjust figures without informing the owner.
💡 4-VAT: Rules vary by country. In Bangladesh, medicines are VAT-exempt; non-pharma products are not. Enter VAT from supplier invoices manually — the software distributes it automatically. Submit monthly VAT returns for product sales and shop rent.
💡What You’ll Learn in This Article ?
- How daily cash reconciliation works in a real retail store
- The proper way to count cash and match sales totals
- How POS settlement receipts are checked correctly
- Common reasons cash shortages happen in retail
- The POS mistake that once created a ৳20,000 discrepancy
- What to do when cash is short or over
- Why honesty matters when handling extra cash
- How new stock is received and verified
- How products are entered into inventory software
- How stores track low-stock products
- Why physical stock counts are important
- Common causes of inventory mismatches
- How inventory discrepancies are fixed properly
- The reality of shoplifting in busy retail stores
- Important inventory rules retail staff should follow
- How VAT works in day-to-day retail operations
- The difference between VAT and VAT-exempt products
- Real retail lessons from practical experience
A – At First Daily Cash Reconciliation: Step by Step
Our store stays open for 14 hours a day. At midnight, when we close, the first thing I do is the cash reconciliation.
This takes a minimum of 20–30 minutes and has to be done carefully — because even a small mistake at this stage causes problems that take much longer to fix.
Here is the exact process I follow every single night.
Step 1: Sort and Count All Notes and Coins
The first task is to physically separate all the money in the cash drawer by denomination.
In Bangladesh, our notes come in ৳5, ৳10, ৳100, ৳200, and ৳1,000 denominations, along with ৳1, ৳2, and ৳5 coins. Each denomination gets counted separately.
From my till every night
100 notes of ৳5 = ৳500. 20 notes of ৳10 = ৳200. And so on across every denomination. I count each pile twice. Only when both counts match do I move on.
This sounds simple, but it’s where most errors happen — especially on busy nights when you’re tired. Rushing this step causes problems later. I’ve learned to always count twice, no matter how late it is.
Step 2: Collect POS Settlement Receipts
Many of our customers pay by card through POS (point of sale) machines from different banks. After closing, I go to each POS machine and print a final settlement receipt. This receipt shows the total amount received through that machine across the entire day.
How it works in practice?
Say ABC Bank’s POS machine collected ৳10,000 in card payments today. The settlement receipt will show exactly ৳10,000.
I note this amount separately for each bank’s machine and add all of them together for the total card payment figure.
The settlement receipt must only be printed after all transactions for the day are complete. Printing it early — before the last customer has paid — will give you an incomplete figure, and your cash will appear short by thousands of taka. I’ve seen this cause a ৳20,000 discrepancy in a single night. More on that in the next section.
Step 3: Record Petty Cash from the Ledger
Throughout the day, sometimes small purchases are made from the cash counter for office needs — a pen, cleaning supplies, a small repair.
Every one of these expenses is written in a physical ledger book at the time it happens. At the end of the day, I add up all these ledger entries to get the total petty cash spent.
Step 4: Add Everything Together
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. . .
Physical Cash Total: All notes and coins counted in Step 1, added together.
POS / Card Payment Total: The combined total from all bank POS settlement receipts.
Petty Cash Expenses: Total amount spent from the counter during the day, from the ledger.
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Step 5: Compare Against the Sales Software
Our store uses sales software that records every transaction throughout the day. After I have my physical total, I open the software and pull the total sales figure for the day. Then I compare the two numbers.
If they match exactly — cash is correct. We close the register and the day is done.
If they don’t match — we have a discrepancy. How we handle that is what the next section is about.
Always double-check your POS settlement receipts before comparing. In my experience, most large discrepancies (৳5,000 or more) turn out to be a POS timing issue — not actual missing money.
B – When Cash Goes Short! Real Reasons and What to Do!
Our store does over ৳3,00,000 in sales on a typical day.
At that volume, a ৳50–৳60 difference at the end of the night is considered normal.
That said, we always aim for a perfect match. Even a small shortage is worth investigating.
Reason-1: Small Discounts Given to Customers
This is the most common reason for small daily shortages, and honestly, it’s one I think most retail accountants can relate to.
When a product costs ৳211 and a customer only has ৳210, we let it go. We give a maximum discount of ৳1–৳2 per transaction at our discretion.
Over a full day of transactions, these small amounts add up — sometimes to ৳100–৳300 by closing time.
Reason2: Collection Errors During Busy Hours
From late afternoon onwards, our store gets busy.
When there’s a queue at the counter and you’re trying to serve people quickly, mistakes happen.
Sometimes a cashier takes ৳490 instead of ৳590. They don’t realize it in the moment — but at midnight, the shortage shows up.
During busy hours, it helps to say the amount out loud before accepting payment: “That’s ৳590, sir.” This one habit alone has reduced our evening errors noticeably.
Reason-3: POS Settlement Printed Too Early
This is the one that causes the biggest headaches.
If someone prints the POS settlement receipt before all card transactions for the day are complete, the receipt will show a lower total than what was actually collected.
When you then compare physical cash against software sales, there appears to be a huge shortage — even though no money is actually missing.
One night our cash was showing a ৳20,000 shortage.
Everyone was panicking. We recounted everything twice. We checked the ledger. Nothing explained it.
Then we realized — someone had printed the POS settlement receipt early, before the last few card transactions had gone through. Once we got the correct final receipt, everything matched perfectly.
Reason-4: Theft (Rare, But Real)
I won’t pretend this doesn’t happen. Over the years, we’ve had a few staff members suspended after it was discovered they had pocketed small amounts from the counter.
We have CCTV running 24 hours, but the cameras don’t catch everything — and the monitor isn’t watched every second.
When a large, unexplained shortage appears repeatedly on the same person’s shift, that’s when the investigation begins.
Always tell your manager immediately. Don’t try to cover it up or balance it yourself.
Your manager will assess the situation — recount, check for missing entries, review the POS receipts.
In most cases the explanation is a process error, not theft. At our store, staff are not required to personally cover shortages.
The owner expects accurate work and will point it out firmly, but the responsibility is on process improvement — not on the individual paying from their pocket.
Note: policies vary by country and employer.
C – When Cash Goes Over ? What to Do and What Not to Do?
Sometimes the physical cash total is higher than the software figure. This happens too, and it needs the same level of attention as a shortage.
Common reasons include a customer accidentally overpaying, a counting error in your favour, or — again — a POS settlement receipt that was printed before all transactions were processed.
Always report it to the owner immediately. Don’t quietly pocket the extra or assume it balances out tomorrow. The money may belong to a customer who overpaid.
It may be a data entry error that will cause problems later. Inform the owner, record it, and reconcile properly.
Honesty here protects your reputation more than any amount of money is worth.
The correct process is to report the surplus, investigate the reason, and then close the sales software with the accurate, reconciled figure.
Any amount that genuinely cannot be explained is noted and kept on record for the owner to review.
D – Inventory Management Process: Receiving, Counting & Fixing Discrepancies
Receiving New Stock
When a delivery arrives, the first thing we do is physically check the items against what we ordered — product by product, quantity by quantity.
If what arrives matches the order, we accept it. If extra stock has been sent, we evaluate: if it’s a fast-moving product we’ll run out of anyway, we keep it.
If we don’t need the extra quantity, we return the surplus to the delivery person on the spot.
Once we’ve confirmed the delivery, we enter everything into our inventory software using a barcode scanner. Each product is scanned individually.
The software automatically counts the quantity as items are scanned — so if we received 10 units of a product, scanning all 10 will register exactly 10 in the system.
The specific entry process varies by software. The principle is the same: physical verification first, then digital entry.
Never enter stock into the system before physically receiving and checking it.
When Stock Runs Low or Runs Out ?
There are two ways we know a product is running low. The obvious one: you look at the shelf and it’s nearly empty. The other: the sales team tells me.
Since the people on the floor are the ones customers ask for products, they’re often the first to notice when something is almost gone — and they let me know so I can flag it for reordering.
Stock Counts and Fixing Discrepancies
Periodically, we do a full physical stock count and compare it against what the software shows. Discrepancies fall into two categories:
Physical stock is higher than software
This usually means a receiving entry was missed or entered short. For example, we ordered 5 units of mango juice and received 5, but only 4 were entered into the software. The system shows 4; we physically have 5. Solution: find the entry error and correct it in the software.
Physical stock is lower than software
This is the more serious situation. When physical count is lower than software, there are a few possible explanations:
- A sale was recorded but the physical stock update was missed
- Goods were damaged and removed but not recorded in the system
- Theft by customers — one of the harder realities of retail
The reality of shoplifting in a busy store
Even with CCTV running constantly, shoplifting happens. A customer picks up a chocolate bar or a small biscuit packet, puts it in their basket, then slips it into their bag or clothing.
The camera may catch it — but only if someone is watching at that exact moment. Small, low-value items are the most common targets.
This is one reason why physical stock counts will sometimes show fewer units than the system expects.
Only make corrections after discussing the discrepancy and agreeing on the cause. Unexplained adjustments to stock figures, even small ones, can erode trust quickly.
E- How VAT Works in Retail Stores: A Practical Guide
VAT (Value Added Tax) is one of those things that sounds complicated but becomes routine once you understand the logic. Here’s how we handle it at our store.
VAT on Medicine vs Non-Pharma Products
In Bangladesh, medicine sales are VAT-exempt. This means when we sell pharmaceutical products, we do not charge VAT to the customer and do not remit VAT on those sales.
Non-pharma products — groceries, baby care items, cosmetics — do attract VAT. Every sale of these products includes VAT that must be accounted for.
How VAT Is Applied Per Invoice
When we receive a delivery invoice for pharmaceutical products, the invoice lists each medicine with its individual VAT amount.
There is also a total VAT figure for the entire invoice. We enter this total VAT amount manually into the accounting software, and the software automatically distributes the correct VAT against each product line.
The system then splits that ৳500 across the 10 products proportionally — so each product carries the correct VAT burden without me having to calculate each one manually.
Monthly VAT on Non-Pharma Sales and Shop Rent
At the end of each month, we calculate and submit VAT on our non-pharma grocery sales.
Additionally, the rent we pay for our shop premises also attracts monthly VAT — this is a separate VAT obligation that needs to be tracked and paid alongside the sales VAT.