13.3 Paying for Purchases with Cash

13.3 Paying for Purchases with Cash

Standard Operating Procedure (SOP)
Version: V2 | Effective Date: October 2025
Review Date: October 2026 | Document Owner: Operations Manager

Purpose

This SOP establishes standardized procedures for handling cash payments when purchasing stock or supplies for Little Coffee Bean Co locations. It ensures proper financial controls, accurate record-keeping, and accountability for business expenditures.

Scope

This procedure applies to all authorized staff members who purchase stock, supplies, or services using cash from the till or petty cash at Little Coffee Bean Co locations, including store managers, shift supervisors, and authorized purchasing personnel.

Equipment Required

  • ODOO Till System (POS terminal)
  • Cash from till drawer or petty cash fund
  • Purchase receipt/invoice from supplier
  • Stock Purchase Form (for documentation)
  • Manager authorization (for purchases over £50)

Procedure

13.3.1 Authorization Requirements

Who Can Make Cash Purchases:

  • Store Managers (up to £200 without additional approval)
  • Shift Supervisors (up to £50 without additional approval)
  • Authorized purchasing staff (as designated by management)

Approval Thresholds:

Purchase Amount Authorization Required
Under £50 Shift Supervisor or Store Manager
£50 – £200 Store Manager
Over £200 Area Manager or Operations Manager
Emergency purchases Store Manager (notify Area Manager within 24 hours)

⚠️ Important: Never make unauthorized purchases. All cash expenditures must be approved and documented.

13.3.2 Approved Purchase Categories

Cash purchases are permitted for:

  • Emergency stock replenishment – Milk, coffee beans, essential supplies when regular delivery fails
  • Local supplier purchases – Fresh produce, bakery items, local vendors
  • Small equipment repairs – Minor maintenance items, replacement parts
  • Cleaning supplies – Urgent cleaning products, paper towels, bin bags
  • Petty cash items – Stamps, small office supplies, minor sundries

Cash purchases are NOT permitted for:

  • Personal items or expenses
  • Large equipment or capital expenditures
  • Items available through approved suppliers (use account ordering)
  • Alcohol or age-restricted products without specific authorization
  • Non-business related purchases

13.3.3 Making a Cash Purchase – Step by Step

Step 1: Verify Authorization

  1. Confirm the purchase is necessary and approved
  2. Check your authorization level against the purchase amount
  3. Obtain manager approval if required (verbal or written)
  4. Document the approval (name, date, time)

Step 2: Remove Cash from Till

  1. Log into the ODOO till system with your credentials
  2. Select “Cash Out” or “Till Withdrawal” function
  3. Enter the amount to be withdrawn
  4. Select reason: “Stock Purchase” or “Petty Cash”
  5. Enter brief description (e.g., “Emergency milk purchase”)
  6. Confirm the withdrawal
  7. Remove the exact cash amount from the till drawer
  8. Close the till drawer immediately

💡 Best Practice: Take slightly more cash than needed to cover potential price variations, but return any unused funds immediately.

Step 3: Make the Purchase

  1. Purchase the required items from the supplier
  2. Pay with the cash withdrawn from the till
  3. CRITICAL: Obtain a detailed receipt or invoice
  4. Verify the receipt includes:
    • Supplier name and address
    • Date and time of purchase
    • Itemized list of products purchased
    • Individual prices and total amount
    • VAT breakdown (if applicable)
  5. Return to the location promptly

⚠️ Critical: Without a valid receipt, the purchase cannot be processed and you may be personally liable for the expenditure.

Step 4: Record the Purchase in ODOO

  1. Log back into the ODOO till system
  2. Navigate to “Stock Purchase” or “Cash Expenditure” section
  3. Create new purchase record:
    • Supplier name
    • Purchase date and time
    • Items purchased (itemized)
    • Total amount spent
    • Cash withdrawn vs. cash spent (reconciliation)
    • Receipt/invoice number
  4. Attach digital copy of receipt (photo or scan) if system allows
  5. Save the record

Step 5: Return Unused Cash (If Applicable)

  1. Count the remaining cash
  2. Log into ODOO till system
  3. Select “Cash In” or “Till Deposit” function
  4. Enter the amount being returned
  5. Select reason: “Stock Purchase Change”
  6. Reference the original withdrawal transaction
  7. Confirm the deposit
  8. Place the cash back in the till drawer
  9. Close the till drawer

Step 6: Complete Documentation

  1. Complete the Stock Purchase Form (paper or digital):
    • Your name and staff ID
    • Date and time of purchase
    • Supplier details
    • Items purchased and quantities
    • Total amount spent
    • Authorization (who approved)
    • Receipt reference number
  2. Attach the original receipt to the form
  3. Sign and date the form
  4. Submit to Store Manager or place in designated folder
  5. Store Manager reviews and signs
  6. Form filed for accounting records

13.3.4 Receipt Management

Receipt Requirements:

  • All receipts must be original (not photocopies)
  • Receipts must be legible and complete
  • Thermal receipts should be photocopied or scanned immediately (they fade)
  • Lost receipts must be reported to management immediately
  • Supplier statements or delivery notes may substitute if original receipt is unavailable (with manager approval)

Receipt Storage:

  • Attach receipts to Stock Purchase Forms
  • Store in designated “Cash Purchases” folder
  • Organize by date and month
  • Retain for minimum 7 years (UK tax requirements)
  • Digital copies stored in ODOO system when possible

13.3.5 Emergency Purchases

When immediate purchases are necessary (e.g., milk shortage during busy period):

  1. Notify Store Manager or duty supervisor immediately
  2. Obtain verbal authorization (document who, when, what)
  3. Follow standard cash withdrawal procedure
  4. Make purchase and obtain receipt
  5. Complete documentation within 2 hours of return
  6. Store Manager notifies Area Manager within 24 hours

💡 Emergency Purchase Tip: Keep a list of local emergency suppliers (addresses, phone numbers, opening hours) at each location.

13.3.6 Reconciliation & Accountability

Daily Reconciliation:

  • All cash purchases must be reconciled during shift cashing up (SOP 13.4)
  • Cash out + Cash in = Total cash movement
  • Receipts must match ODOO records exactly
  • Discrepancies investigated immediately

Personal Accountability:

  • Staff member who withdraws cash is responsible for:
    • Safekeeping of cash until purchase is made
    • Obtaining valid receipt
    • Returning unused cash promptly
    • Completing all documentation
  • Failure to provide receipts or complete documentation may result in personal liability
  • Repeated documentation failures may result in loss of purchasing authorization

Quality Checks

Before making purchase:

  • ✓ Authorization confirmed and documented
  • ✓ Cash withdrawal recorded in ODOO
  • ✓ Exact amount withdrawn (or slightly more for contingency)
  • ✓ Supplier details confirmed (location, opening hours)

After making purchase:

  • ✓ Valid receipt obtained with all required details
  • ✓ Items match what was authorized
  • ✓ Amount spent matches receipt
  • ✓ Unused cash returned to till immediately
  • ✓ Purchase recorded in ODOO system
  • ✓ Stock Purchase Form completed and signed
  • ✓ Receipt attached to documentation
  • ✓ Manager review completed

Safety Notes

  • Cash Security: Never leave cash unattended. Keep cash secure on your person until purchase is made.
  • Personal Safety: When carrying significant cash amounts, consider taking a colleague or informing someone of your route and expected return time.
  • Fraud Prevention: Never allow others to use cash withdrawn under your name. You are personally accountable.
  • Data Protection: Store receipts securely. They contain business financial information.

Troubleshooting

Issue Solution
Supplier won’t provide receipt Request invoice or written confirmation. Do not complete purchase without documentation. Find alternative supplier if necessary.
Receipt lost after purchase Notify manager immediately. Request duplicate from supplier. Complete incident report. May require personal reimbursement if receipt cannot be obtained.
Insufficient cash in till Request safe withdrawal (SOP 13.5). Use petty cash if available. Delay purchase until cash available. Contact manager for alternative payment method.
Price higher than expected If within authorization limit, proceed and document. If exceeds limit, contact manager for additional approval before purchasing.
ODOO system not recording withdrawal Complete manual Cash Withdrawal Form. Notify IT/manager. Update ODOO when system restored. Do not proceed without documentation.

Related Documents

  • SOP 13.1 – Till System
  • SOP 13.4 – Shift Cashing Up Form
  • SOP 13.5 – Safe Log Form
  • SOP 13.7 – Errors
  • Section 1.3 – Troubleshooting Escalation Protocol
  • Section 17.16 – Financial Management and Accounting Policy
  • Section 18.1 – Stock Ordering Details

Compliance & References

  • UK Tax Requirements: HMRC guidelines for business expense documentation and receipt retention (7 years minimum)
  • VAT Regulations: Valid VAT receipts required for reclaiming VAT on business purchases
  • Company Policy: Financial Management and Accounting Policy (Section 17.16)
  • Audit Standards: Internal audit trail requirements for cash handling and expenditure

Document Control
Version: V2 | Effective: October 2025 | Review: October 2026
Approved by: Operations Manager | Company: Little Coffee Bean Co

This SOP is part of the Little Coffee Bean Co Standard Operating Manual. For questions or clarifications, contact your line manager or the Operations Team.