What the Penny Phaseout Means for Your Business [VIDEO]

The penny is no more. So what does that mean for your business, and your books?

Rounding Cash Transactions

How cash payments will be affected.
With the phaseout of the one-cent coin in the U.S., cash transactions will now be rounded to the nearest five cents.

Accounting Remains Precise

Your system still tracks cents.
This does not impact your pricing, sales tax calculations, or financial reporting. Your accounting system still tracks transactions down to the cent.

Cash Only, Not Cards or Checks

Rounding only affects cash payments.
The rounding only applies to the final total in cash payments, not credit cards, ACH, or checks.

Impact on Retail Businesses

Small adjustments at the register.
If you run a retail or cash-heavy business, you may notice minor rounding differences. These are typically recorded as a “cash over/short” or rounding expense.

Service-Based Businesses

Likely no impact.
For most service-based businesses, you likely won’t see any impact at all.

Bottom Line

Accounting still works in cents.
Your accounting still works in cents, even if your cash drawer doesn’t. If you have questions, consult your CPA before making changes.

More Resources:

• How to Prepare for a Penny-Free Economy
• What Will Change When the Penny Is Gone? Everyday Impacts You Might Not Expect
• What Do Postmarks, Pennies, and Paper Checks Have to Do with Your Taxes? [VIDEO]
• What to Do with Your Pennies Before They Disappear