Should you still take cash?

The case for cash is short and it is not wrong. No processing fee, money in hand the same day, nothing to go down at the worst possible moment.

The case against it is longer, less obvious and mostly made of small numbers that nobody adds up.

What cash actually costs

Banking it costs money. Most business current accounts charge for cash deposits, often per hundred pounds or per transaction, and a business banking £1,500 of cash a week is paying a real percentage to put its own money in its own account.

Counting it costs time. Cashing up, reconciling a float, fixing the night the till was £8 out and getting to a branch or a post office is unpaid labour. Fifteen minutes a day at the end of a shift is more than an hour a week from your most tired hour.

Discrepancies cost more than they should. Cash goes missing in tiny amounts and the investigation is always worse than the loss. Every business with a till has had the conversation and nobody has ever enjoyed it.

It is invisible to your reporting. A card payment attaches itself to a booking, a customer and a service. A £40 note tells you nothing. If a third of your takings are cash, a third of your reporting is guesswork and your busiest service may not be the one you think.

The record keeping is on you. Cash still has to be recorded accurately for VAT and for tax, and HMRC takes a dimmer view of a weak cash trail than of almost anything else. Good records are not optional just because there was no card machine involved.

The honest comparison

On a £40 service at 2.5% plus 35p, the card fee is £1.35. Against that, the cash equivalent has a deposit fee, a share of your cashing up time and the chance that this is the £40 that goes unrecorded.

The gap is much narrower than the "cash is free" instinct suggests. On small tickets card is genuinely more expensive. On anything above about £30, once time is priced at all, they are close.

Where cash still earns its place

• Markets, mobile rounds and anywhere signal is unreliable. A dead card reader with no fallback loses the whole sale, not the fee.
• An older client base that pays in cash by habit. Removing it costs you the customer, which costs vastly more than the fee.
• Tips, where cash is often what the team prefers, though the rules on how tips are allocated apply either way.

Where it does not

• Deposits. A cash deposit taken in person defeats the point, because the commitment is meant to happen at booking rather than on the day.
• Anything invoiced. Cash against an invoice creates a reconciliation job that will be done badly.
• Any business trying to measure itself. You cannot improve a mix you cannot see.

The middle position most businesses land on

Keep taking cash, stop preferring it and never let it be the only route. Make card and contactless the obvious default at the point of sale, take deposits and prepayments by card only and put a number on what the cash actually costs you before deciding it is free.

Then look at your split in six months. In most businesses the customers moved to card long before the owner did.