Did you know that cash flow is implicated in more than 80 percent of business failures? As a startup, you may not think it’s important for you to manage your money carefully, possibly because you don’t have too much to manage in the first place.
Cash management is actually more crucial for shoestring startups than other businesses. Why? You have less to go around, which means any mismanagement, no matter how small, hurts more than it otherwise might.
Managing your cash well now also sets the stage for how you’ll handle cash as your business grows. Putting the right policies, procedures, and technology in place can help you grow toward success, both today and tomorrow.
Cash Management Starts with Policy
The first thing you should determine is how you want to handle cash in your business. Where will your team members count cash? Where will they store it? What are the protocols for handling cash when it needs to be counted or prepared for deposit? How often will you deposit your cash?
You’ll also want to think about questions such as how much cash you’ll keep on hand. How will your team prepare floats? In some businesses, such as bars, bartenders are expected to supply their own floats. In other establishments, the business supplies the float.
Policies may also extend to who is allowed to handle cash, and under what circumstances.
The next step for handling cash is to create accountability. Once you have policies and procedures, you must explain them to your team. Why do they need to handle cash this way? Why are floats set up in a particular manner, and how do you determine the right time to deposit cash?
Once you’ve trained your team, you can also assign responsibility. Your cash managers should be given privileges in accordance with their roles. Not everyone requires access to the vault at all times of day, and not everyone needs the same level of security clearance.
Finally, train your team to handle cash on the floor and in the cash office properly. Teach cashiers the method for counting back change, and talk to them about detecting counterfeits. For your back office team, show them the right way to record deposits in the safe and to tally up tills. Teach them how to count and recount quickly and accurately.
Invest in the Right Technology
For a startup without much capital, cash automation technology may not seem like the most important investment. It could actually be the key to managing your cash more effectively.
Cutting the costs of cash handling can assist in reducing overheads and improve the profitability of your business. Freeing up your team’s time could also help you deliver better customer service and improve productivity.
You don’t need to buy a state-of-the-art coin and banknote recycler to get some technological assistance with cash management for your business either. Start small with a cash counter or even a cash sorter. These machines can save your team time and help them reduce accounting errors. In turn, they’ll have more time to focus on your customers, and you’ll spend less time chasing down mistakes in the books.
Get a Helping Hand
If you’re not sure how best to manage cash for your business, it could be time to seek assistance from the cash management experts. They can support you in many different ways. They can help you conduct a cash management audit to discover where you have opportunities to improve.
They can also make recommendations for improving policies and procedures, as well as talk with you about the right technological solutions.
Great cash management is at the heart of any successful business. Even if your budget is a shoestring right now, a strong foundation built on great cash management is key to helping your business grow.