Is Your Business Handling Cash Efficiently? Consult The Checklist
Whether you operate a single store or manage a franchise, effective cash handling is crucial to the success of your business. Navigating the nuances of cash transactions can be challenging, and missteps may lead to time and financial losses.
Your Cash Handling Checklist
Take a moment to evaluate your business's cash handling practices by reviewing the following categories. Identify areas of strength and discover opportunities for improvement. The categories are broken up into three main sections: Deposits, Tills & Transactions, and Operations.
Deposits
Frequency
Consider how often your business makes deposits per week. This can impact cash flow and security. With each deposit made, there is more room for human error and the risk is increased. If your business makes more than five deposits per week, this indicates that your strategy may need to change.
Method
Review the methods you use for making deposits. Whether it's an armored car and/or smart safe, daytime in-person at a bank, or an evening drop-off at a bank, the choice impacts efficiency and security. Keep in mind that making deposits in-person is not just time-consuming but unsafe, especially if deposits are made in the evening.
Cash Loss
Has your business ever experienced the unfortunate loss of a deposit? Whether due to internal shrinkage, external risks, or unforeseen incidents like robbery or accidents, mistakes happen. It could be a sign that processes need to change, especially if it has happened more than once. Learn from past incidents to improve your cash handling processes.
Number of Banks Used
Consider how many banks your business deposits with. The number of banking relationships you use can impact accessibility and convenience. If you currently rely on multiple banks to make deposits, then there’s room for improved efficiency. If accessibility is an issue for your area, it may be time to partner with a CIT service provider.
Tills & Transactions
Cash Transaction Percentage
Understand the proportion of your total sales represented by cash transactions. If an estimated 25% or more of all transactions in your store are cash, this is a number of significance—even more so the closer to 50% or more your business reaches. When cash becomes significant, make sure you have strategic plans in place to ensure cash is handled efficiently.
Overages & Shortages
Evaluate your level of concern regarding cash overages and shortages. If concern is moderate or high, it’s time to evaluate risk management.
Till/Drawer Check Frequency
Determine how frequently your tills or drawers are checked in and out daily. This practice helps maintain transparency in cash transactions. If your business checks tills/drawers 5-10 times per day, there is a moderate level of risk associated with this number. If the number is more than 10, it’s time for a closer look at processes.
Cash Discrepancies
Explore whether your processes include escalation for cash discrepancies beyond the store level. This ensures accountability and resolution for discrepancies. If your business does not have procedures in place, now’s the time to create a plan.
Operations
Labor Hours
Identify the daily labor hours dedicated to cash management. If your or your employees spend 2-3+ hours per day managing cash, there are solutions that can cut down on this time and save money. Efficient use of time in handling cash contributes to overall business productivity, leaving employees and managers more time to focus on the store and its customers.
Business Category
Depending on what industry your business is in, you may have unique cash handling requirements. For example, if your business falls into the retail, dining, or QSR category, you likely have a high level of cash handling needs. If you're in the grocery, C-store, or department store category, your need is moderate. Even if your business falls into healthcare, insurance, or another category that typically doesn't deal with large-scale cash transactions, you could still benefit from cash handling services based on factors like deposit methods and transaction management.
Where Does Your Business Stand?
Now that you understand the different categories of cash handling practices, you can determine your business’s needs. Whether your business requires smart safes, cash recyclers, armored car services, or all three, Loomis’ cash handling solutions provide the necessary support. For businesses adept at cash handling, explore Loomis’ enhanced services tailored to your needs. Those seeking improvement or with a mix of strengths and weaknesses can collaborate with Loomis to transform challenges into opportunities.
Frequently Asked Questions (FAQs)
Why is effective cash handling important for businesses?
Security, efficiency, and accuracy are the top reasons why effective cash handling matters. Effective cash handling can help businesses save time and money by reducing the amount of time spent counting, reconciling, and depositing cash. After all, cash is an asset, and businesses need to have policies and procedures in place to protect it from theft and loss. Accuracy is the last piece of the puzzle, as it is needed to track financial performance and ensure a business complies with accounting standards.
How can cash handling services benefit my business?
Cash handling services can benefit your business in the following ways:
- Reduces the risk of cash losses and discrepancies.
- Frees up labor hours so your employees can focus on other tasks.
- Improves efficiency, helping you streamline processes to save time and money.
- Provides access to technology and software to help you improve accuracy and efficiency.
What are common challenges in cash management for retailers?
Retailers commonly encounter challenges in managing cash, including the heightened risk of errors due to handling a large volume of cash transactions, inconsistencies in cash handling practices stemming from employee turnover, and the perpetual threat of theft from both internal (employee) and external threats.
What are the signs that a business may need to reevaluate its cash handling procedures?
There are several signs that a business may need to reevaluate its cash handling procedures, including:
- Frequent cash losses or discrepancies
- Difficulty balancing cash drawers
- Increased customer complaints
- High employee turnover rate
- Lack of internal controls
- Regulatory changes
If you notice any of these signs in your own business, contact Loomis to speak to a cash handling expert.
How can I reduce the risk of cash losses and discrepancies in my business?
To mitigate the risk of cash loss and discrepancies in your business, establishing cash handling policies and procedures is crucial, coupled with comprehensive training for your employees to ensure adherence. Regular reconciliation works to detect discrepancies and employing a smart safe solution can streamline this process, alleviating the burden of manual cash handling. You can also use technology to automate tasks to free up time for you and your employees.
What is the role of technology in improving cash handling processes?
Technology plays a significant role in enhancing cash handling processes. One example is automated cash counting and reconciliation, which not only saves time but also minimizes the risk of errors. Additionally, it enables the tracking of cash movement, facilitating the identification of potential issues and allowing for timely corrective measures. Moreover, technology provides real-time visibility into cash levels, empowering businesses to make informed decisions.
How often should businesses review and update their cash handling procedures?
Businesses should review and update their cash handling procedures regularly to ensure they are effective and compliant with current regulations. The frequency of reviews will depend on the business' size and complexity and the frequency of changes to regulations. Consult with a cash management expert to gain a better understanding of what your business needs.
How can Loomis customize cash handling solutions based on the unique needs of my business?
Loomis can customize cash handling solutions to meet the unique needs of your business by offering a variety of services, including:
- Cash deposit processing, including sorting, counting, and reconciling
- Transportation of cash between your business and your bank
- ATM servicing on a schedule that is most convenient for you
- Change order management (coin)
In addition to our core services, we also offer several specialized products, including smart safes that track cash movement and provide real-time alerts, and cash recyclers that automatically accept cash, count it, and return change.
Got more questions? We have answers. Contact Loomis to kick off your cash handling journey.
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