Handling Cash-Only Clients Without Risk

Some clients still demand envelopes of cash—think festival organizers in Oaxaca, production crews in Lagos, or pop-up events in Marrakech. Cash smooths local logistics, but it's an AML and accounting headache if you wing it. Here's how I accept, protect, and report cash payments without triggering bank audits or personal safety nightmares.

Photo: Unsplash / Sharad Bhat

The Lagos Production That Taught Me Everything

December 2022, Lagos. A production company hired me to consult on location security for a film shoot. The contract was for $8,500 USD. They asked if I could accept payment in cash—₦7.8 million Nigerian Naira, handed over in a hotel lobby in Victoria Island.

I said yes without thinking it through. The handover happened in a coffee shop. The production manager arrived with a duffel bag. No witness, no receipt template, no plan. I counted the money in a bathroom stall (mistake one), shoved it into my backpack (mistake two), and walked back to my hotel carrying what felt like a Target painted on my back. The money sat in my room safe for three days because I didn't know which bank branch would accept a foreign contractor depositing ₦7.8 million in cash without triggering an anti-money laundering investigation.

When I finally deposited it at a GTBank branch, the teller asked for receipts proving the source of funds. I had nothing. She called her manager. He called compliance. I sat in a back office for two hours explaining my contract, showing emails, and producing my business registration documents. They accepted the deposit, but I got flagged in their system. My accountant later told me I should've filed a currency transaction report with FinCEN (I hadn't). That near-miss taught me to treat cash like radioactive material: handle with protocols, document everything, and get it into the banking system fast.

Pre-Engagement Due Diligence (Before You Say Yes)

If a client asks for cash payment, my first question is "Why?" Legitimate reasons exist: countries with capital controls (Argentina, Nigeria, Lebanon), clients operating in informal economies, or events where electronic payments aren't practical. But "we prefer cash" can also mean "we're laundering money" or "we don't want a paper trail." You need to know which one you're dealing with.

1. Know Your Client (KYC). I request:

• Government-issued ID (passport or national ID) for the signatory
• Business registration documents (certificate of incorporation, trade license)
• Tax identification number (TIN, VAT number, EIN equivalent)
• Physical business address (not a PO box)

Then I run a 15-minute OSINT check. I Google the company name + "scam" or "fraud." I search for the director's name on LinkedIn and cross-reference with company filings. If I'm feeling thorough, I run the company through ComplyAdvantage (free trial covers sanctions and PEP watchlists). If they're on OFAC, EU sanctions, or Interpol notices, I walk away.

2. Draft a cash-specific contract clause. My standard contract has a section titled "Cash Payment Terms" that specifies:

• Currency and denominations (e.g., "₦500 and ₦1,000 notes only, no ₦5,000 notes")
• Location and time of handover (e.g., "GTBank Victoria Island branch, weekdays 10:00-15:00")
• Receipt requirements (signed by both parties, photo ID attached)
• Exchange rate locking (e.g., "Payment converted at XE.com mid-market rate on date of receipt")
• Who covers exchange fees and deposit fees (usually client)

I also include: "Consultant reserves the right to refuse cash payment if denominations are non-standard, if client refuses to provide identification, or if funds appear to violate anti-money laundering regulations."

3. Structure payment milestones. Never accept 100% cash upfront. I prefer:

• 30% deposit via bank transfer or PayPal (this establishes a paper trail)
• 40% mid-project (cash acceptable if needed)
• 30% upon completion (cash acceptable)

The initial bank transfer gives me a clean audit trail and proves the client has access to legitimate banking. If they can't do a $2,550 wire transfer but can produce $8,500 in cash, that's a red flag.

Cash Acceptance Protocol

• Witness: Bring a trusted assistant or coworker to witness the handover. Both sign receipt.
• Location: Choose secure, camera-monitored environment (hotel business center, bank lobby).
• Count & authenticate: Use portable counterfeit detector pen + UV flashlight. Count aloud, separating bills by denomination.
• Document: Fill out receipt on the spot with serial numbers for high-value notes. Digital photo (with client consent) stored in encrypted folder.

Sample Receipt Template

Receipt #: 2025-08-08-01
Client: Monteverde Productions
Amount: ₦1,500,000 (One million five hundred thousand Naira)
Purpose: Location security consulting, Phase 2
Date/Time: 08 Aug 2025, 14:15 WAT
Witness: Sarah Kim (signature)
Consultant: [Your Name] (signature)

Security & Storage

• Split cash into three sealed envelopes labeled A/B/C. Keep A on person (money belt), B in hotel room safe (with tamper seal), C deposited same day.
• Avoid carrying more than 24 hours. Deposit into trusted bank or currency exchange with cameras and receipts.
• Use GPS tracker (AirTag) in bag carrying cash. Activate Lost Mode if bag leaves your vicinity.

Compliance & Reporting (The Part That Keeps You Out of Jail)

Cash triggers reporting requirements in most countries. Ignore them and you're committing a federal crime. Here's what I do:

Call the bank before you show up. In Lagos, I learned this the hard way. Now, 24 hours before deposit, I call the bank and say: "I'm a foreign contractor. I'll be depositing ₦7.8 million in cash tomorrow at 10:00 AM. I have a signed contract, receipts, and ID. Who should I ask for?" They'll route you to a business banking officer or compliance desk. This prevents the teller from freaking out and calling security.

Know your country's cash reporting thresholds:

• United States: FinCEN Form 8300 for cash receipts over $10,000 USD in a single transaction or related transactions. File within 15 days of receipt. Penalty for non-filing: up to $25,000 + criminal charges.
• Canada: Report to FINTRAC if you receive $10,000 CAD or more in cash.
• UK: No threshold, but you must report suspicious transactions to NCA.
• EU: Varies by country; Germany requires reporting over €10,000, France over €1,000 for some transactions.

I keep a spreadsheet with thresholds for every country I work in. If I'm close to the limit, I file even if not required—better to over-report than under-report.

Record the transaction same-day in accounting software. I use QuickBooks Self-Employed. Entry looks like:

• Date: 08-Dec-2022
• Description: Cash payment from Monteverde Productions, location security consulting Phase 2
• Amount (local): ₦7,800,000 NGN
• Amount (USD): $8,500 USD (XE.com mid-market rate 08-Dec-2022: 917.65 NGN/USD)
• Attachments: Scanned receipt, photo of cash, contract excerpt, bank deposit slip

Tax reporting: Convert to your home currency using the official exchange rate on the date you received payment. IRS publishes yearly average rates; I use the daily rate from XE.com and attach a screenshot. My accountant files this as foreign income on Schedule C.

Anti-Money Laundering Safeguards

• Decline cash if client refuses identification or if funds appear to be “split” among multiple couriers without explanation.
• Keep an AML log noting source of funds, purpose, and supporting documents. Retain for five years.
• If suspicious activity arises, file Suspicious Activity Report (SAR) per local jurisdiction or consult attorney.

Cash Handling Kit

• Portable counting tray
• UV counterfeit light
• Carbon copy receipt book + pen
• Tamper-evident bags (Tyvek)
• Money belt and RFID pouch

Post-Transaction Steps

1. Deposit or exchange cash within 24 hours.
2. Send client confirmation email with scanned receipt.
3. Update ledger, attach receipts, note exchange rate and bank fees.
4. Notify accountant/bookkeeper for monthly reconciliation.
5. Destroy temporary notes securely (cross-cut shredder / burn if safe).

Handling cash can be worth it for the right projects, but only when you run it like a mini compliance department. Vet the client, secure the handover, document everything, and move funds into the banking system fast. Then you can get back to the work that actually pays the bills.