Running a successful business can be hard, but thankfully there are all kinds of tools that help make things easier. Take commercial kitchen equipment, for example, which helps restaurants prepare large amounts of food quickly. And barcode scanners, which allow shops and grocery stores to ring up merchandise in a flash. What many business owners don’t realize is that there are tools that can help simplify cash management, too, saving time and money in the process. Here are five reasons why it might be time to give your current cash management system a facelift.
1. Handling cash takes a lot of time
You can get a lot done in 20 hours. For some perspective, in that amount of time, the average person could binge-watch every single Harry Potter movie back-to-back, learn the fundamentals of a new instrument, or run multiple 5Ks (though, just running one in a day sounds tiring enough to us, to be honest). You may be surprised to learn that the average merchant spends over 20 hours each month handling cash, according to data gathered from a Brink’s-sponsored survey conducted by IHL Group, a research and advisory firm. Just imagine what you or your employees could be doing with 20 hours a month instead of spending that time managing cash, preparing deposits and taking them to the bank. When is the last time you stepped foot in a bank to make a personal deposit? You shouldn’t have to for your business, either.
2. Bank deposit fees add up quickly
Isn't it strange that your bank charges you to put cash in your own account? No matter the size of a business, nearly all of them rely on banks when it comes to making cash deposits. But fees for making those deposits aren’t cheap. Then you have to think about “convenience” and what that might be costing you. Often times, deposits are made at whichever banks are closest to individual storefronts. Let’s say you run a local restaurant with two locations on opposite sides of town, so you use two different banks. That means you’re having to manage two banking relationships that may come with different deposit fee costs. Have you considered what you might spend that extra money on if you weren’t paying high cash deposit fees? True convenience can be achieved without spending an arm and a leg on deposit fees.
3. There’s a lack of visibility into cash
Picture this: you’re trying to work on budgeting your money better in your personal life. But every time you log in to your online checking account, you can’t see what your account balance is. In that scenario, it would be pretty hard to pinpoint your spending habits, and it would be harder to tell if someone had stolen your debit card and was making purchases. Having key data is crucial, including when it comes to a business’ finances. Trying to make smart, data-driven business decisions is pretty challenging to do if you don’t have access to accurate data about your cash. With access to important information about your cash, it can be much easier for you to spot trends, problem areas in losses, or overages in cash on hand.
4. Safety and security threats pose risks
In theory, having employees depart from your store to make deposits at the bank seems like a reasonable idea. But in reality, it’s leaving those employees and your cash vulnerable to theft, loss and shrinkage. If money were to be lost or stolen, it could take out a large chunk of weekly revenue and other fees to recoup. To cover its expenses in such a short amount of time, a business without significant reserves might be forced to pay high fees to lenders. Or if an employee was involved in an accident on the way to the bank, they could be seriously injured. Plus, there could be major financial consequences in the form of liabilities and workers’ compensation. There is an easier way to risk less with your cash and get it safely into your account.
5. Access to working capital is limited
In a world where so many things are now instant or fast (like jumping on the internet right away without delay or that awful dial-up sound, posting on social media, and ordering packages online and having them delivered within days), having access to your cash should be, too. It doesn’t do you much good if your cash is stranded in a register or safe. This tied-up working capital can lead to reliance on other more costly lines of credit.
Five Reasons Why You Should Update Your Cash Management
