What must be done with cash overages and shortages?

The necessity to report cash overages and shortages immediately is crucial for accurate financial management and accountability. When discrepancies in cash balances occur, whether due to errors or theft, swift reporting allows for timely investigation and resolution of the issue. This practice helps maintain the integrity of cash handling procedures and ensures any underlying problems are addressed quickly, which is essential for safeguarding assets and maintaining trust within an organization.

While some organizations might have thresholds that determine how discrepancies are handled, reporting such incidents promptly is a best practice to ensure all cash transactions are monitored effectively. Ignoring smaller overages or shortages can lead to larger issues over time, as it may establish a precedent for neglecting financial controls. Additionally, averaging out discrepancies monthly could obscure individual errors that require attention, resulting in potential losses going unnoticed for longer periods. Thus, immediate reporting is the most responsible and effective approach.