Retail is one of the most difficult industries to succeed in. Even some stores with the most innovative products and best business plans don’t make it past the first few years. The majority of the time, these failures can be attributed to poor cash management. Your retail business might be losing money in many areas that you’re not aware of. If they’re not fixed, you could be forced to close your doors.
The more money you can keep in your bank account, the higher your profits and the more likely you can stay in business and thrive.
Here are five cash-related problems that could be holding your retail business back, and how to stop them from affecting your profits.
Internal theft is rampant in retail. The number of sticky-fingered employees in the industry is rising. Not only will dishonest workers steal your merchandise but they’ll steal your hard-earned cash given the opportunity, too. But it doesn’t have to hurt your business. You don’t have to accept it. There are things you can do to prevent internal theft. By installing video cameras, implementing strict cash control systems, and automating your cash handling, you can curb retail theft.
Lack of Accountability
It’s difficult to fix cash-related problems when there’s no accountability at your retail business. When the nightly counts don’t match up to the totals reported by your POS system, a problem obviously occurred, but you can’t prevent it from happening again in the future if you have no accountability. If cashiers are allowed to share tills, if cash isn’t counted at every step, and if your cash isn’t restricted to specific employees, there’s no way of tracking losses and discrepancies. You’ll have no way of knowing who is responsible and where and when that person made the error.
To avoid cash discrepancies, have cash handling procedures in place—make sure you know exactly who is touching your cash, why, and when. Your money should be counted and reported every time it exchanges hands or moves from one place to another.
High Labour Costs
When you’re spending too much on labour, it can be hard to have decent cash flow and make a profit. You can reduce labour costs significantly by automating your cash management system. Machines can count, sort, wrap, accept, and dispense cash at a much faster rate than your employees. When your cashiers don’t have to come in early to count and double count their floats or stay late to balance the registers, you can save considerably on labour costs while increasing efficiency.
Poor Cash Training
Your cashiers need to know how to handle any transaction, including processing discounts, sales, returns, and exchanges. If they’re not properly trained and don’t fully understand how to process these transactions, they’ll be more likely to make errors that can lead to losses. Document your training procedure to ensure that they have a source of reference to turn to if in doubt and always have a manager on staff to help new employees.
When you own a retail business, a lot of your revenue comes from cold, hard cash. Unfortunately, if that cash is being manually counted and sorted, you could be losing some of it to human error. When your employees are swamped and multi-tasking at the register or tired and rushed to get home at the end of the night, they might make innocent errors. Though these mistakes aren’t made to defraud you, they can still hurt your retail business. Investing in a cash management solution can solve this issue. All of your cash will be counted and sorted with 99.9 percent accuracy, so you can reduce the risk of human error.