Retail Sales – Small Business
Substantiation of daily sales (taxable and exempt), sales tax collected, non-cash sales, over and short, and cash payouts is paramount.
Failure to document the daily transactions supported by a z-out tape places the business at risk if subject to a state (sales tax) or federal (income tax) audit.
Proper documentation is established by the use of a Daily Reconciliation Report. The report documents the beginning and ending cash (change) and receipts and uses of daily cash.
An example of a Daily Reconciliation Report can be referenced here.
Print the Report and make copies. Attach the daily z-out tape as well as credit card receipts. In addition, attach any invoices for which cash from the register was used to pay.
Adequate documentation of sales and sale tax collected is the first line of defense should the business be subject to audit.