Cash handling laws

Written by john hewitt
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Cash handling laws
Implement strict cash-handling policies for staff to prevent theft and fraud. (Image by Howard Lake; Flickr.)

There are few specific UK laws governing cash handling. Individuals who violate the cash handling procedures set out in their employment contracts might find themselves subject to criminal prosecution or civil liability. Any responsible business that has its employees handling significant amounts of cash will create a document explaining its policy on handling cash. Employees who violate that agreement can be subject to termination or other consequences in more severe situations.

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Criminal consequences

Employees who steal cash can be brought up on criminal charges related to theft or even fraud. If the offence is repeated over a period of time, the penalties can be severe with years in prison. If an employee allows the theft of substantial amounts of cash through gross negligence, she can be charged with that crime and terminated from employment.

Policies

Companies that want to ensure their employees are legally responsible for the errors that they make when handling cash must develop specific policies. If there is no cash handling policy, it becomes far more challenging to bring up legal or civil charges against an employee who acts negligently or maliciously while handling company funds.

Associated procedures

Accurate record-keeping is a pillar of a sensible cash handling policy. Without accurate records, it can be impossible to prove what has happened with company assets. Any intake or outtake of money should be recorded in a ledger or spreadsheet close to the time when it actually happened. Accurate accounting is mandated by UK law. If the information in the ledger can be independently or automatically confirmed, the chances of fraud or theft escaping detection are reduced.

Effects

Implementing cash handling procedures is expensive, but it reduces the amount of risk accrued to the business. Conducting business electronically instead of using cash has some expenses -- such as credit card charges -- but it reduces the need for developing extensive cash handling policies and implementing monitoring procedures. Prosecuting or suing for cash handling errors is rarely a profitable activity for a business, so doing whatever possible to avoid such an eventuality insulates the business from further risk.

Benefits

Educate employees about the importance of following exacting cash handling procedures. Monitor employees for work satisfaction and criminal records if they are involved in cash handling. If possible, assign only those employees with a record of responsibility and professionalism to cash handling tasks. Some accounting experience or basic knowledge of the field also increases the chances of legal compliance.

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