Retail is an industry with razor-thin margins and stiff competition. To see this in action, all you need to do is look around at store closures from some of the world’s top retail brands. If they find it necessary to scale back operations, it’s little wonder you feel pressure to streamline and optimize your retail business.
Cash management is an important factor in most retail operations. Unless your business is solely online or one of the few establishments not accepting cash, you likely deal with many cash transactions on a daily basis.
These five lessons in small business cash management can help you streamline and optimize your cash management performance.
1. Use the Small Business Cash Management Tools at Your Disposal
The first lesson in small business cash management for any retailer is to use the tools at your disposal. Technology has improved by leaps and bounds. It’s easier than ever to find a technological solution to help you streamline your cash management.
These tools can include devices like currency counters and sorters. Devices of this sort help you leave behind inefficient manual processes, such as counting and sorting cash by hand.
2. Make Your Cash Management Policies Clear
If someone asked you to describe your policies around small business cash management, what would you tell them?
Many retailers would be at a loss. In many cases, this is because they don’t have clear guidelines. If you can’t provide a simple summary, it may be time to revisit your policies.
Good policies around small business cash management are a must, because they guide you and your employees whenever you handle cash. Be sure to take the time to explain to your employees why you handle certain tasks the way you do. Understanding usually encourages compliance.
You should also have clear rules for what happens when an employee doesn’t follow procedure. Finally, review the policies on a regular basis, especially when you adopt new cash management technology.
3. An Ounce of Prevention Is Worth a Pound of Cure
Policies in small business cash management are so important because they can prevent mistakes from happening. Procedures can also produce paper trails, making it easier to trace back mistakes that do occur.
Further, creating a maintenance schedule for your cash management tools and making plans to upgrade and replace older technology are also preventative. These measures are often worth more than the upfront costs. Maintaining devices may cost you a small amount each year, but that’s much better than needing to spend on major repairs to a machine.
4. Controlling Cash Handling Costs Can Help Your Bottom Line
Being concerned with cash management for your small business can help your bottom line. In an industry with slim margins, that’s good news.
Cash handling costs more than most people think it does, which is why you need to keep a careful eye on the cost of every cash transaction. From there, investigate possible ways to streamline and improve your procedures. Automation may be one excellent choice, as it can reduce the labour costs associated with handling cash.
5. Invest in Record Keeping Now
Every retailer should keep good records by default. Many businesses wait until there’s a problem to improve their record-keeping activities. This can cause issues if you’re ever audited, and it also makes it more difficult to trace back internal errors.
Investing in record keeping now can save you some headaches later on.
With these five lessons in hand, you can improve small business cash management in your company.