There’s a fundamental paradox in handling cash: The more you generate, the more it costs you. It might seem nonsensical at first, but it’s true. As you do more in sales, you’ll need to employ more resources to handle those funds efficiently and effectively.
As the amount of cash you need to handle increases, it may become more apparent your business has a cash handling problem.
What’s the Problem?
Cash handling is what happens when you deal with the currency flowing through your business. Customers make purchases. You then need to deal with the cash they tender. Bills need to be counted, coins need to be rolled, and all of it has to go on deposit at the bank.
The use of cash is increasing in some industries, contrary to an overall trend toward credit card and debit purchases. Many retailers are seeing increased amounts of cash flowing through their tills.
If you’re unprepared to handle this increased amount of cash, you’ll end up with a cash handling problem.
Types of Problems
Some businesses don’t need an increase in the volume of cash to create a cash handling problem. Some problems exist from day one of your business. An increased amount of cash may be what exposes the issue.
Problems can originate with lax policies around handling cash. They can also stem from improper handling procedures, or even from individual employees handling things in a slightly different way. Even an untidy workspace can cause a problem.
The bottom line is problems happen, and they cost your business big money.
Avoiding the Issue
The next question you probably have is “how can I avoid a cash handling issue”? If it’s costing you money, you want to resolve the problem now. If your business doesn’t currently have an issue handling cash, you’re probably keen to make sure one never develops.
There’s good news. It’s actually fairly easy to avoid and resolve cash handling problems.
Better Policies
The first thing you should do is create a clear, comprehensive policy about how to handle cash. When should the cash be counted? Where will it be counted? How will the amounts be recorded and how will bank deposits be prepared?
Good policies around cash handling nip problems in the bud. If you have a good policy in place, it won’t matter how much cash you handle.
Standard Procedure
Another step you can take to prevent or avoid cash handling problems is to create standard procedures for handling cash in your business. Make sure you communicate these procedures to your employees. Enforce the procedures too. Make sure everyone uses them in the same way.
This will alleviate any developing cash handling problems in your business. When all of the cash is handled the same way, it’s much easier to spot mistakes and discrepancies.
Clean up the Back Room
This might seem over-simplistic, but in an industry where profit margins are razor-thin, every nickel counts. A messy room not only makes it easier to lose track of cash, but it also makes it easier for unscrupulous individuals to make it disappear.
Take a few minutes and put things back in order. Having a neat, tidy workspace is a loss-prevention measure. It also makes it a nicer space to be in!
Bring in the Machines
Even if you take all of these steps, cash could still seemingly “disappear.” Human beings are prone to making mistakes. Instead, automate your processes. There are several different kinds of machines you can use to improve your cash management.
Many of the machines also make safe storage spaces for your cash, which is especially important if you tend to keep large quantities on hand.
Many businesses have issues with managing their cash, but they don’t have to be your problems.
