Did you know that 82% of all businesses fail due to poor cash flow management? Among other reasons, a lack of efficient cash handling can push many small businesses backward.
For any business that accepts cash, efficient and secure cash handling at the point of sale (POS) and in the back office is essential. However, we understand that the task may seem overwhelming for retailers and small restaurants.
This blog will address the issues related to cash management and provide solutions to tackle them. Join us as we guide you through tips and strategies to overcome cash management challenges.
Cash management is a critical aspect of restaurant and retail businesses. It involves handling, storing, and transferring cash. The following is a list of tasks that encompass restaurant and retail store cash management:
Despite being aware of these processes, restaurant and retail owners sometimes fail to implement them. Several reasons, such as theft, improper accounting systems, and lack of technology to track cash flow, make it challenging for them to ensure accuracy.
Let's discuss each of these challenges in detail.
There is no doubt that businesses face many cash management challenges now and then. Here are the challenges that you must have come across while managing the cash flow of your business:
When dealing with a lot of cash, there’s always a chance of staff making mistakes or intentionally mishandling money during processing. While trying to save money and the cost of outsourcing the cash processes, you lose more money with the traditional cash management system.
No matter how many preventive measures you take, like quickly noting receipts, keeping cash safe, depositing money on time, and making sure different people handle recording and depositing, you can only partially erase the risk of funds missing.
Taking cash from your place to deposit is the most risky deal with money because of the potential for theft. This is a more significant concern for smaller shops since they usually need more security, making them more tempting for thieves. If your staff is moving the money, it puts them at risk of violence and could land your business in legal trouble. Also, remember that if your in-house team carries the cash, insurance might not cover it if it gets stolen.
Managing cash, whether you do it in-house or not, involves staffing. Those hours spent dealing with money and waiting in line at the bank are a significant hidden cost when you handle cash internally. And remember the time and energy it takes to hire, check backgrounds, train, and oversee the staff responsible for cash handling.
Even with a careful cash handling system, you can't escape the occasional human error when reconciling books. Handling big piles of cash takes up much of the workforce and opens the door to counting mistakes and discrepancies. Switching to cash recycler technology can wipe out these issues and save you from those time-consuming cash audits.
Another significant challenge in cash management is the lack of visibility into cash. It means not having a clear view of cash across a business. This makes it tough to keep tabs on where the money is going and what's happening in different parts of the business. Without a POS system, restaurant owners and retail businesses drown in manual paperwork or spreadsheets. Yet, they can't have complete visibility
To effectively manage cash in restaurants and retail businesses, it is essential to focus on the following things:
A POS system is an essential tool for retail and restaurant businesses, as it can ensure that the physical cash matches the cash recorded in the system with utmost accuracy. Similarly, a safe and secure cash handling system like Loomis smart safes can guarantee the safety of your physical cash.
With the OneHubPOS cash management feature, it is now easy to maintain the cash log of every terminal in your store and across stores. Our integration with Safe Point enables us to manage your cash from the register to the smart safe. When your register limits its cash capacity (set by you) - your employees are forced to transfer it into a smart safe with an automated trigger and take a receipt every time a transfer happens. At the end of the day, reconcile your books by matching cash transactions to account for sales made with cash versus other payment methods.