We have all heard about the demise of the production of the Canadian penny. That was old news. Now, however, the time has come when we will start to see fewer and fewer pennies in circulation. Effective Monday, February 4th, banks no longer have to give out rolls of pennies.What does that mean for you and your business? Read on!
Most businesses conduct commerce electronically. For those that deal with cash, imagine one day, going to the till and there are not any pennies inside. You no longer have rolls in the back office, nor can you get any from the bank. It is probably mid to late February, (after your stock of pennies has been used up.) Now what do you do?
Our first suggestion is to decide if you are going to train your staff to round the cash sale or the change due. For ease, we suggest rounding the change. Regardless of what you decide to round, (the sale or change given back), it will result in the same from the CRA’s standpoint. We suggest that you get a little yellow sticky note to attach to your till and write the following on it for your staff to follow:
If change = .01,.02, round down to the nearest 10 cent
= .03,.04, round up to the nearest 5 cent
= .06,.07 round down to the nearest 5 cent
= .08,.09, round up to the nearest 10 cent
*REMEMBER THE ROUNDING ONLY APPLIES TO CASH SALES – NOT DEBIT OR CREDIT ONES! *
Say you run a dollar store and the bill before taxes is $6.00. After the register applies PST and GST, the final amount owing is $6.72. The customer gives you a $10 bill. Now what?
If you punch into the till $10, the change due will show $3.28. You have no pennies so you will have to round the change given back. From your little sticky, your staff should give back $3.30,since the change ends in an 8.
You will need to train your staff how to round up and down unless you can program your cash register to do this. HOWEVER, the rounding rules only apply to CASH transactions, so you want to ensure only these types of sales get rounded. It may very well not be worth re-programming your till for cash only transactions.
Many businesses will now be off when balancing the cash sales to the till. No worries. The amount of rounding goes both ways so the net effect should be marginal. If your business does not have an expense account called Cash Over/Short, now would be a great time to make one.
Any marginal variances when counting cash can be offset against this account when balancing to the sales receipts.
Some may find that rounding the sale may be an easier concept to grasp. Remember the example about the $6.72 sale and the $10 bill to pay for it? You can either round the sale to$6.70 giving out $3.30 in change OR you can round the change after the till has calculated $3.28 in change to $3.30. You see, it’s the same!
Feel free to click on this link which will take you to a sign you can post by the register for both your staff and customers to see, or make one similar to this:
Effective immediately our store will round change due to customers in the following manner:
If your change due back ends in a:
.01,.02, your change will be rounded down to the nearest 10 cent
.03,.04, your change will be rounded up to the nearest 5 cent
.06,.07, your change will be rounded down to the nearest 5 cent
.08,.09, your change will be rounded up to the nearest 10 cent
Now, what to do with that empty penny space in the till…..