Handling cash floats – simple practices that work
When it comes to handling cash we always need to be very careful, being responsible for the money you have with you is always a must.
If we look at the most common procedures we would find a few common trends that usually lead to problems such as lack of trust, discussions between the Captain and heads of departments, and even money missing from the float.
So what can we do to make lives of everyone onboard a bit easier and a bit happier?
I would say one of the biggest problems arise if accounting for cash is not done quickly enough, as it is so easy to forget what the receipt was really for. Left alone just let the receipt get lost.
We did a survey among the crew members that handle cash floats and staggering 85% said that they account for their cash receipts once a month. 60% said that they mix their own cash with the cash they are given by the Captain and report based on receipts they have, not the balance they should have on hand.
Of course, the crew member usually is the one who suffers most at the end as if he or she lost a receipt he basically paid for it out of his own pocket. So it is in the best interest of the crew member, as well as the Captain, and ultimately the owner to keep cash well accounted for.
Yes I know, no one likes accounting. Even us! That is why we created Latitude 365 – because we don’t like boring time-consuming accounting.
We heard several times “why don’t you create an app so the crew can just take a picture of the receipt as soon as the cash is spent”. We actually created a phone app just to discontinue it a few months later. The crew does not find it easy to record their receipts while they are also trying to grab the shopping cart with all the bags and get out of the line in the supermarket. No chance!
It is easy for those sitting in the yacht management office to ask the crew to do this, but we have to stay realistic. And work on simplifying the process. Because it is simple: if you make it simple to do it – the crew will do it. That is it.
How do you make it simple? Well, as we already noticed accounting once a month doesn’t work. Accounting on the spot does not really work either. Based on our observations, what seems to work is accounting at the end of each day.
You probably noticed how large boats implement the procedure that the floats have to be returned to the Purser at the end of each day. Well, they figured it out with the timing! How can we now make this less time-consuming, especially for the boats that don’t have a purser?
This is where we can help you out with a bit of simple automation. In most cases it is only the Heads of Departments that are entrusted cash on the regular basis. Some boats use top-up system, some use cash floats.
I will quickly illustrate each system. Lets say Captain Simon gives €1000 to Chief Stewardess Mary. With the top-up, Mary would keep spending the money until she runs out and then come to the captain for more (I will get to how this usually is accounted for). With the floats, Mary takes the €1000, goes shopping, brings back all her receipts, gives them all to the captain and returns the balance of the cash.
The problem of the top-up is how to account for it. The problem of the float is that it is time-consuming for an already busy Captain…
Ok, those are the problems, tell me a solution, you say! We have a solution – let Mary account for her own receipts herself at the end of every day. Yes, I know, she can make mistakes. So the Captain still needs to check. And this is what we allowed the Captain to do: see what Mary reports every day, even a copy of the receipt attached to each record and the balance calculated automatically.
All this work relieved from the Captain! While he still can maintain full control. Let me tell you more about this:
Why would Mary make mistakes? Because usually, she would have to use Excel, that is well-known for human error. With Quicken it is too complicated to merge files later on. With neither Excel or Quicken you can see what Mary is doing and correct her so she can learn. And so you dont end up with a ton to check at the end of the month.
Online software simply doesn’t work onboard, basta. You need a solution that works offline, yet allows to easily share information. Without complicated servers to install, just download and go, right? We got it!
With Latitude 365 you can let Mary work offline, then sync and see what she reported, and if she reported every day. You don’t have to add all receipts up on the calculator and count the cash she gives back to you anymore. She will do it for you with the help of a software that will minimize her human error for you.
All you need to do is review her account once a week and possibly edit the budget codes if she got those wrong. But we help even with that – we simply show Mary only those codes that she usually needs, keeping it simple for her and making sure she can see only the budget that she needs to track, like Interior Budget only.
Watch this video demo to see how this can work.