---
title: "Cash, DIT, and tips review"
sidebarTitle: "Cash and DIT"
description: "Reviewing bank reconciliations, change funds, the investment account, cash over/short and deposits-in-transit, and the tips variance."
icon: "money-bill-transfer"
---

> **For AI agents:** the complete documentation index is at [llms.txt](/llms.txt). Append `.md` to any page URL for its markdown version.

The cash and cash-adjacent accounts, plus the tips reconciliation that sits alongside them.

<Info>
  **Source:** `Rackson_RRS_RCY_Review_Process.docx` sections 7, 8, 28, and 40.2.
</Info>

## Bank reconciliations

- Review the bank reconciliation for **aged, unresolved items** each period.
- RRS bank reconciliations are typically clean; the most aged items tend to be **outstanding checks** rather than deposit timing issues.
- **Aged payroll checks are common** and are generally left to the client's own process (Mike) to resolve up to a point, rather than PBI writing them off unilaterally.

## Change funds and petty cash

- Store-level **change fund balances are confirmed with the client at year-end** rather than reconciled in detail every period.
- **Change Fund (GL 10800)** and **Office Petty Cash (GL 11000)** are two separate, simple schedules. Both rarely have activity period to period — most periods both are confirmed as "no activity" and moved on from quickly. These are **the fastest items in the entire review.**

## Investment account

An **annual** investment account that is not touched or adjusted until the account statement arrives, **typically in November**. No monthly activity is expected.

## Cash over/short and cash-in-transit (DIT)

- A store-by-store schedule tracks expected POS cash deposits against what actually posts to the bank.
- **Before treating a variance as a true cash over/short, confirm it isn't a timing item** — a deposit posted just after period end.
- **Watch for patterns rather than one-off variances.** Recently acquired stores have historically shown more recurring cash-handling issues and warrant closer attention than the portfolio average.
- POS cash figures also feed a secondary check on backup/processing fees. These are effectively hard-coded month to month and reviewed for reasonableness rather than rebuilt from scratch.

### Step-by-step checklist — cash and DIT

<Steps>
  <Step title="Scan the bank reconciliation">
    Look for any item older than one clearing cycle; note it on the checklist if unresolved.
  </Step>
  <Step title="Open the cash over/short and DIT schedule">
    Confirm the period-end date on the inputs matches the close date.
  </Step>
  <Step title="Scan the store-by-store variance column">
    For any store above the normal range, **check whether the deposit posted after period end** before treating it as a real variance.
  </Step>
  <Step title="Flag repeat offenders">
    Flag any store showing the same pattern for a **second consecutive period**. Recurring cash-handling issues, especially at recently acquired stores, should be **escalated rather than re-noted silently** each month.
  </Step>
  <Step title="Confirm the change fund and investment accounts">
    Neither should show unexpected current-period activity — change funds are only confirmed at year-end, and the investment account only moves in November.
  </Step>
  <Step title="Mark the section reviewed">
    Once all store-level variances are explained or documented for follow-up.
  </Step>
</Steps>

## Tips

- Compare **tips collected per the sales entry (POS)** to **tips paid out per payroll** — the difference is the net tips variance for the period.
- This net amount is **reviewed each period rather than written off automatically.** Betsy does not clear it without review.
- Some of the variance nets out at the store level — tips over at one register offsetting tips short at another within the same store. For the most part this **still needs to be looked at store-by-store** rather than only at the consolidated total.

<Warning>
  **A recurring, stable variance should be raised with the client (Mike) directly rather than cleared as routine.** A repeatable variance usually points to a **POS or payroll setup issue** rather than noise. Illustrative: a recurring variance of roughly $300 for the month was flagged for exactly this reason.
</Warning>

<Note>
  Historically, monthly tip write-off amounts in the **$900–$1,000 range** have been seen and approved by the client. Amounts of that scale are still **reviewed line by line before posting**, not rubber-stamped.
</Note>

### Step-by-step checklist — tips

<Steps>
  <Step title="Pull both figures">
    Tips-collected from the sales entry (POS) and tips-paid from payroll, for the same period.
  </Step>
  <Step title="Calculate and compare the net variance">
    Against the prior period's variance.
  </Step>
  <Step title="If the variance is new or has grown">
    Investigate at the **store level** before writing anything off.
  </Step>
  <Step title="If the variance is a recurring, stable amount">
    **Raise it with Mike** rather than clearing it as routine.
  </Step>
  <Step title="Document the decision">
    Write off, hold, or escalate — record it on the schedule before closing the item.
  </Step>
</Steps>

## Weekly and interim support files

<AccordionGroup>
  <Accordion title="Deposit verification — the client's weekly process">
    Performed weekly, mid-week (currently Wednesday), by the client's bookkeeper **Karen**, tying POS deposits to the bank and to the GL.

    <Warning>
      This is a **shared workbook** with the client — the file **must have macro content enabled on open**, or the formulas driving the reconciliation will not calculate correctly.
    </Warning>

    PBI's involvement is deliberately light: **spot-check rather than fully re-perform**, and assist with filtering or investigating by store if the client identifies a variance needing a second set of eyes.
  </Accordion>
  <Accordion title="Bank rec file">
    The client saves reconciliation detail by week, sometimes across several files. PBI posts the related journal entries from that detail **as part of ongoing work through the month**, rather than waiting until period end to catch up on the whole month at once.
  </Accordion>
  <Accordion title="An AI-assisted approach was explored and set aside">
    The client's bookkeeper has become efficient enough at the manual process that moving it into an AI-assisted tool did not clearly add value and, if anything, risked losing customization built into the current shared worksheet. **May be revisited if workload changes.**
  </Accordion>
</AccordionGroup>

<Note>
  Getting the weekly deposit verification done **before** period-end close begins is what allows the close timeline to be accelerated — the DIT summary is already substantially resolved by the time the balance sheet review starts.
</Note>

## Related

- [RRS cash and bank workpapers](/internal/customers/rackson/workpapers/rrs-cash-and-bank) — the preparer's steps
- [RCY inventory and cash workpapers](/internal/customers/rackson/workpapers/rcy-inventory-and-cash) — the RCY deposit verification and store 1418 safe count
- [Delivery service reconciliation](/internal/customers/rackson/review-process/delivery-service-reconciliation) — the other major source of DIT