Commentary

Is your business effectively managing cash?

Remote cash capture technology and automated cash handling can help restaurants streamline cash-handling processes, reduce transportation requirements, gain faster access to deposits and improve security controls.

Image courtesy of iStock

January 2, 2019

Editor's Note: An earlier version of this article ran on Fast Casual, a Food Truck Operator sister publication.

Micki Seager is director of product marketing at Fiserv, which provides financial services technology.

By Micki Seager

Despite the growth of electronic payments, cash is still the most widely used method of payment among consumers, creating a unique set of challenges for businesses. They must manually collect, count and reconcile cash numerous times, and an employee or armored transportation service must deliver it to a bank. All lead to costs and unwanted risks and liability.

A TowerGroup survey found that employees at one retail foodservice company can spend 27 hours or more per week counting, verifying, reconciling and preparing cash deposits. In addition to physical manhours, a recent Celent study found that 23 percent of cash-handling expenses are related to transportation. A courier's price tag is based on several factors, including distance to the vault. One large retailer reported transportation expenses of more than $500,000 per month.

Cash theft is the second-highest area of loss for retailers and has increased by 20 percent from the prior year and is greater than bad checks, credit card fraud, refund fraud and Internet fraud combined. Shrink cost the overall U.S. retail economy $48.9 billion in 2016, as reported by the National Retail Federation.

According to a 2018 IHL Group study, up to 71 percent of cash-related costs are the result of front-of-store activities such as replenishing change at tills and closing out drawers at the end of a shift. Sites run better and lines move faster when management is visible. The burdens of cash management divert the manager's attention with tasks such as counting out and balancing cash drawers for every shift, preparing and making end-of-day deposits.

Clearly,retail businesses can benefit by streamlining cash-handling processes, reducing transportation requirements, gaining faster access to deposits and improving security controls. Remote cash capture technology and automated cash handling can help them improve cash management with processes that are easy to track, manage and implement across multiple locations.

When introduced, RCC solutions initially helped large organizations through secure, currency-accepting hardware devices or "smart safes," coupled with cash tracking and reporting software. As banks began offering provisional credit for validated currency residing in smart safes at business sites, demand intensified. However, prohibitive upfront costs and integration challenges meant that only a few dozen large banks and the largest armored couriers initially offered RCC. The businesses, meanwhile, were locked into long-term contracts with little flexibility had little control over hardware, software and vendor selection, and suffered from decentralized data challenges.

Democratizing RCC

Recent changes in RCC technology have accelerated smart safe adoption through hardware and vendor-agnostic solutions that allow businesses to choose their smart-safe devices and service vendors based on the needs of each location, regardless of the geographical footprint.

This integrated data model across multiple vendor relationships provides greater flexibility and choice for restaurants. It opens the door for regional banks, community banks and credit unions to compete head-on with larger institutions in a burgeoning industry. Financial institutions can now offer a single banking relationship for all customer locations. Smart safes enable provisional credit by the RCC provider for validated cash deposits, so physical transportation of cash is no longer as time sensitive.

Automated cash management solutions help retailers analyze their cash positions, providing finance and operations teams with clear visibility into cash activity across all stores. That level of intelligence permits each location to make important decisions concerning staffing, security protocols/procedures, float fund management, banking relationships and frequency of cash-in-transit pickups.

Smart safe technology automates cash counting and deposits and provides complete transparency to all transactions. With a dependable audit trail, employee accountability increases. Any resulting shortages are readily discovered and pinpointed with a software system that has configurable alerts and customizable reporting. Modern RCC devices also provide counterfeit detection, automatically identifying fraudulent currency.

RCC and smart safe solutions provide cleaner cash handling, streamlined operations and reduced loss, leading to increased profits. Individual sites can choose their preferred courier, based on location, banking relationships and quality of service to help reduce errors and give managers more free time to keep the business running smoothly.

The importance of the more flexible RCC solutions cannot be understated. Previously a technology that solved cash supply chain management problems for a select few, RCC has truly come of age, providing a cost-efficient, one-size-fits-all solution that does not tie businesses to a particular manufacturer, armored courier or cash processor. Through an agnostic approach, these offerings deliver cost savings, security benefits and greater cash management control to businesses.

Micki Seager is director of product marketing at Fiserv, a provider of financial services technology.