One of the most common assumptions that circulates about cash management is that it is more cost-effective to just do it yourself than it is to invest in automation technology. While manual cash management might seem like the more economical option, there are certain hidden costs that, when compared with automated cash management systems, are actually more expensive. Here are three reasons why you might want to reconsider the costs associated with cash management.
1. Labour Costs
The cost of labour is hefty, representing roughly 70% of the overall cost of running a business. Companies are constantly looking for ways to be more efficient when it comes to labour, yet when businesses continue to run their cash management process manually, they’re missing out on one of the primary ways to reduce overall costs. Manual cash management means scheduling additional shifts each day to deal with everything from vault transfers to cashing out tills at the end of the night. While you might think you are saving money by continuing to manually handle your own cash, you’re actually contributing to the significant labour costs that make up your business. With automation, the cash management technology does the work for you, allowing you to schedule less and save money on labour.
2. Cost of Error and Theft
No matter the amount of training or experience your employees have, a manual cash management process is always vulnerable to human error. Even the very best employee can still make mistakes that can cost your business considerable money. Mistakes ranging from not giving customers the correct amount of change, to incorrectly tallying bills at the end of the night can quickly add up.
While shrink is an unavoidable part of business, it does not have to take place within the cash management process. Automation is one of the easiest ways to cut down on cash management costs, because automated tools guarantee accuracy. Automated cash managements tools also eliminate the risk of internal theft. A manual cash management system necessarily puts a great deal of faith in your employees, while making you incredibly vulnerable to dishonest or dissatisfied workers who see an opportunity. By automating the process, you can eliminate the financial losses attached to theft within cash management.
3. Loss of Productivity
Manual cash management processes can be a huge drain on your time, with the routine tasks involved in cash management taking up large parts of your day while costing your workforce in energy and productivity. A manual cash management process means regular pickups, vault transfers, and end of the night accounting and paperwork. Productivity and efficiency are integral parts of a thriving business, but when you continually have to take time out of daily operations for cash management, you are losing both.
While there can be a financial cost to this as well, like the labour costs associated with paying employees to undertake numerous manual cash management tasks throughout the day, the toll here isn’t entirely financial. Loss of productivity can hamper team morale, with employees becoming exasperated by the tediousness of the job, and it can also have a negative impact on customer service. Interruptions throughout the day to perform cash management tasks also means taking time out from being on hand for customer service. Additionally, things like trips to the safe to make deposits, or to make change, can mean holding up customers, or slowing down your customer service representatives as they attempt to serve people. The cost of decreased productivity can be high, but is easily avoidable with automated cash management systems.