August 15, 2017, 12:15 pm By Bridgit Chayt, Fifth Third Bank
New payment methods constantly are being introduced and there’s significant buzz about what’s new. Everything from mobile payments to NFC technology to the transition to chip-enabled cards are trending topics in the industry. The fact remains, however, that for now, cash still is king.
In fact, approximately one-third of consumer transactions were made in cash last year, according to the Federal Reserve’s Cash Product Office. While that percentage is lower than it was five years ago, cash remains the single most widely used payment method. For purchases under $25, cash has grown in recent years to be used in more than half of transactions.
The reality is, processing these cash payments can be burdensome and often falls on managers who have multiple responsibilities to juggle — most of which produce a more direct benefit to the business than counting bills and coins.
Fortunately, technology in cash processing — and more comprehensive service offerings from financial institutions to provide a single point of contact — can lessen the burden and allow managers to spend more time on revenue-producing activities, such as customer acquisition and retention, vendor negotiation and employee development.
Manual Cash Processing: Inefficient & Error-Prone
Managing and processing cash can be a logistical headache, especially for convenience store owners and operators, who process hundreds of low-dollar purchases every day.
For many businesses, processing cash payments is a process with many flaws, including:
- Asset protection: Risk of both internal and external theft.
- Risk mitigation: Safety concerns during transport to banks for deposit.
- Productivity and labor costs: Long, manual processes are both time-consuming and cumbersome for employees, without positive impact to revenue.
Not to be overlooked, the time spent transporting cash from a convenience store location to a banking facility is a window of vulnerability, with capital being off-premise and unsecured.
Even for stores in urban settings, close to a bank branch, personnel can spend 20 minutes or more transporting cash and making the deposits. For rural and suburban stores, this timeframe can grow to as much as an hour.
Finding a Better Way to Process Cash
Financial professionals can solve these cash collection issues by implementing one of today’s innovative smart safes. Such devices installed at store locations allow employees to simply feed currency into the note reader throughout the day. The note reader verifies and authenticates the currency and automatically tracks the deposit by employee and day totals. Provisional credits can be made within 24 hours of a cash deposit; the information is automatically relayed to the bank, where the organization’s account is typically credited the next day.
Such a currency processing solution helps eliminate errors and reduces the risk of theft. Because receipts are regularly collected from the device by an armored courier service, employee safety also is improved.
By replacing manual cash processing with an automated solution, store personnel are freed from the labor-intensive deposit preparation, allowing them to focus on the critical task of delivering customer service.
An End-to-End Approach to Cash Handling
As the cost of manual processing continues to rise, proven and cost-effective technology solutions are becoming far more attractive. But a smart safe alone, while beneficial, still requires a manager to be responsible for coordinating with an armored courier, delivering to a bank, researching transaction outages, and more.
Rather than taking a piecemeal approach to currency management, financial professionals should look to improve cash handling using an end-to-end methodology. This approach allows a manager to simplify all touchpoints with one central contact who manages the entire cash process on behalf of the business.
Finding the right solution starts with selecting a banking partner that truly understands your business. The provider you choose should offer solutions that are highly flexible, enabling you to meet your unique business objectives. For example:
- Do they offer a coordinated solution to streamline cash processing beyond simply installing a smart safe?
- Do they eliminate the need for a manager to schedule an armored carrier cash pickup?
- Do they proactively address service issues?
- Do they offer a concierge-level service that can virtually eliminate even the smallest cash processing responsibilities?
With the right solution in place, financial professionals can dramatically improve cash and currency processing, enhancing cash flow and helping to liberate trapped working capital that can now be used to support critical business objectives. In doing this, finance also is able to demonstrate how it can be an invaluable partner to the organization.