If you are planning on calculating how much money your business spends on cash handling, you could be in for a shock! While calculating cost of cash is important for any business, it can be an eye-opening process that will leave you with a clear picture of where you spend the most money throughout your cash management process.
Cash handling is not a simple operation for businesses. The transaction process must be carried out with accuracy. Cash processing to balance registers and maintain cash flow can become quite complicated and can involve some risks. Once you consider the many different parts of the process and the cost associated with each one, costs can quickly add up. Here, we have outlined why calculating cost of cash can be a surprise for businesses, where these costs come from, and how you can alleviate the pressure of huge cash handling costs.
What You See (Is Not All You Get): Visible Costs
Certain costs that go hand-in-hand with processing cash are expected and stay relatively stable from month to month. These visible costs include any supplies that you might need for your cash management process, such as envelopes, bands for cash bundling, or cash balancing sheets. With proper planning, your business can likely anticipate these costs in advance and they shouldn’t fluctuate greatly from month to month. While visible costs add to your total when calculating cost of cash, they can be budgeted for accurately and are expected to occur each time you complete your cash management process. However, visible costs are not the only expenses that you incur when dealing with cash; hidden costs can sneak up on your business and end up driving up the expense of your cash management process.
More Than Meets the Eye: Hidden Costs and How to Find Them
Hidden costs are just that: hidden. They are not immediately obvious and can be extremely unreliable. When it comes to handling cash, hidden costs can be found at each step of the cash management process. Hidden costs add up particularly quickly when it comes to manual cash handling. Manual cash handling can take up huge amounts of time for your staff and can vary from day to day.
If your cash handling process is unorganized or if errors occur, processing cash at the end of the day to balance your tills can become a lengthy process. With the variability of how long it takes to complete the cash management process, your labour costs can skyrocket. With labour costs already making up a large portion of operating costs, having additional—and varying—amounts of labour costs is an unnecessary expense.
Hidden costs such as additional labour, costs of cash handling mistakes, and inadvertently accepting counterfeit currency are difficult to budget for because they are highly variable. They may seem like unavoidable consequences of cash handling, but there are solutions available that can remove the instability of manual cash handling and provide your business with accuracy and security.
What Happens When You Invest in Automation?
Automated cash management exists to streamline the daily operations of your business. It is designed to increase the efficiency and accuracy of your cash management process. It can be used from the point-of-sale terminal to counting and sorting currency in your cash room. Making the investment in automated cash management provides your business with security and efficiency. There are many ways that you can make processing cash benefit your business; learn more about what types of automated cash management systems can help your business. Don’t stay bogged down by manual cash handling, calculating cost of cash is the first step to lowering costs and increasing your profits.