[Question] Retail business: Accounting for POS losses

[J7J]

Hi,

How would you account for the money that is short from the till when a daily reconciliation of cash per POS system vs actual cash counted shows a difference (ie. "shortbanked")

Would it be captured as sales (ie. VAT supply) and then when shortbanked reversed as sales (reverse VAT). Or would it be a seperate expense (eg. POS losses) and not merely reversed against sales? What would be best practice?

Thanks a lot.

[Justloadit]

In my opinion, the operator should replace the shortfall, else it can breed to petty theft on a regular basis across all tills.

I would create a separate expense item to keep tabs on the amount of shortfall, but as a journal Cr with VAT included in the same manner as you would handle a discount entry.

[Dave A]

It's shrinkage

And I regret it goes down as an expense line item - without a tax invoice that you could claim back input VAT with

Tax deductible though (within reason).

I'm with Justloadit on the "cracking heads" side of this.