Are you managing your pennies?

1 June, 2013

Sometimes changes made by the government are easy to manage and require very little adjustments to your financial management, but then there are some changes that can be very confusing.  Many businesses would say that having to change the way to manage the penny is not a significant issue, but you should be very clear about the dos and don’ts

When taking cash, you need to round up or down – When you are excepting cash from the customer you will need to either round up or down to the nearest 5 cents.  If you are selling a product that costs $43.16, you would round that down to $43.15.

What about Credit cards, cheques, and debit – This can be left at exact change.  Since there is no exchange of the pennies, then you can leave the transaction as is.

Businesses have the option of how they want to manage the handling of the penny.  Businesses have a choice of making change in pennies until the supply runs out, or rounding out the final amount (or equivalently the change owed) of any cash payment to the nearest five-cent increment.

The last penny was minted May 4, 2012 in Winnipeg. Some six billion pennies are expected to be surrendered by Canadians over the next six years, and melted down and recycled by the Royal Canadian Mint.

These changes to the handling of the penny will result in adjustments to your financial statements and cash flow.  Depending on the volume of transactions this could actually be a significant influence on your financial performance.  Proper managing and recording of this will be important for businesses.  Numbers Plus Ltd is a small business accountant servicing Mississauga, Oakville, Milton, Toronto, Brampton and other areas inside and around the GTA that can help with your financial statement needs.  Contact us today to discuss your needs.

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