Cash management is an important aspect of almost any business. Whether you handle just a small number of cash transactions or a high volume of cash every single day, handling it the right way is key.
You might wonder just how cash management could impact your business. Understanding the effects of poor cash management can help you see how beneficial a good process can be.
So, what are the impacts of handling cash management in a less than ideal way? These impacts could be holding your business back.
Increased Risk from Counterfeit
Any business that handles cash must be prepared to deal with potential counterfeit.
With the right technology on your side, you can be able to spot counterfeit early in your cash handling process. You may even be able to avoid accepting it, which could mean you no longer need to take an accidental loss.
Evaluating how your business identifies counterfeit currency is one step to increasing the security of your cash handling process.
High Labour Costs
It’s no secret that the cash handling process is time-intensive. From beginning to end, there are many different touch points, such as accepting cash, counting back change, tallying up the till, and more.
A poor cash handling process increases these touch points and also adds to the tasks your employees must complete. They might spend more time counting, sorting, and getting deposits ready or preparing floats. They may need to spend time tracing accounting errors and fixing them.
This can increase the labour costs associated with handling cash in your business. Inefficiency could also increase the number of people you need to have on a single shift. With a more efficient process, you can reduce the amount of time your team members spend handling cash, freeing up both their time and reducing the need for extra hands.
For business owners who are already vulnerable to high labour and operating costs, an inefficient cash handling process only compounds the challenges.
Risk of Loss
Security is also a concern when it comes to handling cash. The more touch points in your cash handling process, the more opportunities there are for someone to act dishonestly. It could also lead to poor tracking, which increases disorganization and the risk of loss.
An effective cash management process, by contrast, improves security. Automation can reduce touch points in the cash handling process, and better procedures can improve cash visibility for the business. It could also improve accountability, and in turn reduce your risk even more.
Lack of Insight
Poor cash management often goes hand in hand with inefficiency and disorganization. This can lead to confusion and inaccurate reporting, as well as other issues.
In essence, poor cash management gives you poor visibility of your cash assets. In turn, you can have a harder time seeing trends and issues within the business. This makes it much more difficult to make sound business decisions.
By contrast, good cash management improves visibility and insight. With the right cash handling technology and procedures in place, you can make even the toughest decisions with more confidence.
What You Can Do
Your business may see some, but not all, of these impacts, and every business will experience them somewhat differently. The fact remains that how you handle cash has very real impact on your business, your growth, and your success.
Investing in your cash management, from new technology to proper training, can make a world of difference. Not sure where to get started? Get in touch with the experts and discover where you have opportunities to improve.