Many small business owners choose to deal primarily in cash in order to reduce their costs. After all, when you accept credit cards, you get hit with fees that have to come out of your pocket. These fees can accumulate to quite a large sum of money every month. But you might be surprised to hear that handling cash is actually more expensive than the high rates you’d have to pay for accepting cards instead. And the more money you bring in, the more it’s going to cost you to handle and manage all of the hard currency coming through your registers.
If you took a serious look at all of your expenses for handling cash, you’d certainly wish that you had a way to streamline your processes and cut down on the cost. Understanding where you’re spending your money when managing and handling cash and investing in cash management tools can help you break down the costs and reduce your spend.
Use a Cost of Cash Calculator
Using a cost of cash calculator can help you figure out just where you’re losing money while handling cash. Every business is going to be unique, with specific methods, challenges, and risks that need to be taken into account, depending on your cash flow and cash management processes. The amount of money you’re losing can fluctuate drastically compared to your competitor or neighbour.
A cost of cash calculator can break down your company’s unique direct and indirect costs so you can have a better handle on your situation and understand which cash management solutions could help you reduce your expense.
A cost of cash calculator will help you become aware of many costs that you might not even be aware of. Of course, storing your money will require a cash room—which is prime real estate that you could be using to make money instead. And you probably spent a lot of money on a top-of-the-line vault. Plus, counting, double counting, and sorting cash is going to cost you in labour. But there are other costs that come into the equation that you might not have thought of, too.
Lax handling routines, a disorganized workspace, and dishonest employees can also put you at risk of significant losses. You could easily misplace money if you don’t have strict procedures for managing and handling cash. Your employees might steal from you because you have no accountability. You could also have to deal with losses as a result of human error—if your employees are doing all the counting and sorting, miscalculations can easily occur. And don’t forget about counterfeit—if you’re not using counterfeit detectors and if your staff members aren’t trained to spot fraudulent bills, you’re the one who will be eating those losses.
When managing and handling cash improperly, you’ll see a significant effect on your bottom line. And you’ll always be in the dark and confused about the losses if you have no idea where they’re coming from.
Getting Back on Track
Once you’ve broken down all of your cash handling costs thanks to the cost of cash calculator, you can better understand where you’re losing so much money—where you’re facing challenges and what solutions you need to consider to fix the issue. Then, you can take back control of your cash handling by investing in the right cash management solutions.
When you partner up with a cash management solutions provider, you’ll get strategic, trusted advice, recommendations, suggestions, and ongoing support in order to find customized solutions that work for your unique business needs and budget. You’ll get cash management products, like cash recyclers, currency counters and sorters, and counterfeit detectors, that can help you drastically reduce your costs of handling your company’s money.