For CFOs, cash is all consuming. Their entire jobs revolve around money. But you’re probably far more interested in the profits that are counted at the end of the day than you are in the actual counting that is taking place to get to that final number. After all, profits are what matter to a business at the end of the day. But if you took a moment to consider the cash management process—the way your business counts, sorts, stores, processes, and manages its cash—you might find some new opportunities to improve your bottom line.
Here are some of the things that CFOs should know about cash management.
Handling Cash Affects Your Bottom Line
Handling cash is actually more expensive than accepting credit and paying the fees associated with it. If you consider all the direct and hidden costs associated with cash-handling activities, you’d probably be shocked at all of the money your company is wasting on a process that is largely ignored by the head office.
But think about it. You not only have to pay for coin wrappers, bill straps, a vault, and a cash room, but you also have labour costs associated with the activities, and costs associated with fraud, internal theft, and human error. And the more lax and inefficient your procedures are, the more money you’re throwing away on cash handling. Just use a cost of cash calculator to find out how much you’re really spending on managing cash.
All of these expenses can hurt your bottom line—but they don’t have to.
Handling Cash Affects Your Cash Flow
Every CFO knows just how important cash flow is to a business. You understand that poor cash flow could result in bankruptcy. If you don’t have access to your cash when you need it to process payroll and pay vendors and bills, you won’t be in business for very long. You have likely taken many steps to improve your liquidity—from chasing down non-paying customers to implementing a just-in-time inventory system.
However, you might not have considered adjusting your cash management processes as a solution. The way you handle cash can have a big effect on your cash flow—the more money you need to process transactions and have in your vault, the less money you have to spend on other areas of your business. Plus, without reducing your cash-handling expenses, like your labour costs and losses, you have even less money available to spend when you need it.
Investing in Cash Management Solutions Is a Wise Business Decision
If you want to reduce the amount of money you’re spending on accepting money, then it would be wise to invest in some cash management solutions. Counterfeit detectors, coin counters, and bill sorters can all increase your productivity, drive efficiency, improve accountability, and enhance security. They can reduce your labour costs and reduce your losses. In addition, some solutions, like cheque scanners and currency recyclers can significantly improve your cash flow by reducing your vault holdings and allowing you to have access to your cash sooner.
When you automate your systems and eliminate your archaic manual processes, you can spend less time on these repetitive tasks, you can enhance accuracy tenfold, and you can reduce instances of fraud and theft. Investing is these high-tech products can provide a high ROI for years to come.
Grow and Prosper with Effective Cash Management
CFOs must consider all opportunities for financial growth. They must reduce costly expenses, they must improve cash flow, and they must make investments that can help their companies become financially stronger so they can grow and prosper in the competitive market. Considering that your cash management can negatively affect your bottom line and your cash flow, automating your systems is a great solution.