You’ve probably been hearing more and more about cash management lately. In fact, it’s one of CFOs’ top priorities in 2016. But this new buzz word isn’t just a passing fad. Finance professionals are just starting to realize the benefits of properly handled and managed cash. And you should too.
Here’s what you need to know about it.
1. What It Is
Cash management is a broad term, but it essentially refers to the way your organization handles and manages its cash in the front end and the back end. It’s how your cashiers process transactions. It’s how you count and sort money. It’s how you reconcile your day’s totals. It’s how you disburse money. It’s how you deposit and store your cash.
The goal of cash management is to maximize the availability of cash, reduce losses, reduce wasted time, increase productivity in the handling of cash, and heighten security.
Many CFOs are opting, wisely, to invest in cash management solutions. These solutions include high-tech machines like cash counters and sorters, currency recyclers, cheque scanners, and counterfeit detectors. They automate the way you handle and manage cash in order to meet the goals mentioned above.
2. Managing Cash Costs More Than You Think
Why focus on the way you manage cash? Because it’s more costly than you might think. The wasted time on counting, double counting, and sorting cash can result in high labour costs. Manually handling these activities and processing transactions can lead to huge losses and shortages due to human error. Not having the right technology in place can make you vulnerable to counterfeit, external theft, and employee theft.
Using cash management solutions can allow you to reduce the costs involved in cash handling. It can make a significant difference in your bottom line.
3. It Can Improve Cash Flow
Cash flow is the lifeblood of your business, particularly if you work for a small business or startup. You know that as CFO, cash flow needs to be your number one priority at all times. Not having enough money to pay workers, vendors, and bills when needed can lead to insolvency—which is unfortunately a very common occurrence in business.
Properly managed cash can allow you to have more liquidity. Solutions can help you reduce your vault holdings, reduce your losses, reduce your labour costs, and have access to your funds sooner. With the right solutions, you can have more money running through your company when you need it.
4. Finding the Right Solutions for Your Business Is Key
You might be sold on the idea of investing in solutions, but before you run out and buy every new top-of-the-line machine on the market, take a step back and look at your real needs. Not every business needs every solution. If you don’t process many cheques, you won’t need a cheque scanner, for example. If you don’t accept many coins, you might not need a state-of-the-art coin sorter.
To ensure that you’re buying the right solutions for your company, consult with a cash management solutions provider. The right provider can do more than just sell you products—it can help you better understand your unique needs and create a customized package that will result in the highest return on investment.
5. It Should Be a Priority
In 2016, make cash management a priority. The true cost of handling cash is significant. Investing in the right high-tech solutions and automating your cash handling system can lead to great benefits and a high ROI. You’ll be able to reduce losses and labour costs, increase security, boost productivity, and optimize cash flow. The right solutions can solve a lot of the common cash-related problems that you’ve been facing for far too long.
