Cash flow is a concern for every business. It can cause challenges for managers and owners. In fact, a majority of businesses that go under cite cash flow issues as the cause of closure.
Obviously, managing business cash flow properly is key to keeping your doors open. There are many things you could try to improve cash flow in your business. Adopting a smart safe might be one of the smartest steps you can take.
Before looking at how smart safes can help you manage your cash flow more easily, let’s take a quick refresher look at what’s involved.
Business cash flow refers to the money entering and leaving a business. When a client pays you, cash flows in. When you need to pay a bill or make change, cash flows out.
Some businesses have positive cash flow, which means they have more cash coming in than going out. Others have a negative flow, which means more cash leaves the business than comes in. It’s possible for cash flow to reverse quite quickly, sometimes even from day to day.
Both positive and negative cash flow have to be managed carefully. Managing negative cash flow could mean relying on credit or taking steps to improve cash inflow and reduce outflow. Positive cash flow must also be managed carefully, so the business can continue to meet obligations in the future.
So, how do smart safes improve business cash flow? The answer lies in their ability to help you manage the levels of cash in your business.
Businesses make deposits, often at a certain time of day or when cash on hand hits a certain threshold. On busy days, you may find you need to make more deposits than usual, or risk having too much cash on hand.
Depositing cash has two benefits: it reduces the risks of having it on hand, but also frees it up for your business to use. If it’s sitting around in your store, it’s probably not doing the work you need it to.
Making deposits too frequently, though, might leave you scrambling for funds to manage petty cash expenses or make change for customers. It can be difficult to find a balance.
The constant pattern of deposits and withdrawals not only affects your cash flow but also costs you money. The more transactions you make, the more you’ll pay in fees.
A smart safe helps you rationalize and manage those transactions, so you’re only making the deposits you need to. The safe stores your cash securely. It may even communicate how much you have for deposit on hand, which could then be added to the working capital in your account.
Another way technology like smart safes can help manage cash flow is by reducing the store float. The safe might be able to assist you in making smarter decisions about how much cash you need to have on hand.
This is one of the ways smart safes help you rationalize your deposits. Using the data available, the safe suggests how cash much should be deposited. Then you don’t need to pull funds back out of your account as soon as they’ve gone in.
Since deposits may be held securely in the safe, you can also schedule a once-a-day pickup from your CIT provider or reduce your bank runs to once per day.
A smart safe might be a smart solution for your business, especially if you want to take steps to improving business cash flow. Get in touch with the experts and discover just what a smart safe could do for you.