Every entrepreneur knows that cash is the lifeblood of a business, but few realise that the way one manages cash, can be the difference between success and failure.
Automated cash management has become a vital component of every cash-centric business, particularly in the retail trade. As much as the use of credit cards and online banking is encouraged, consumers remain sceptical and nervous of internet fraud and cybercrime and continue to prefer hard cash as the primary means of transacting.
The days of physical cash are not numbered. Current cash in circulation is approximately R140 billion, having grown from R119 billion in 2014, according to the South African Reserve Bank and according to a recent banking report, cash represents close on 90% of all transactions in South Africa.
If you run a business, some of this cash will find its way into your cash register (or, heaven forbid, the envelope you hide in the fridge until you make the trip to the bank). As a business owner, it is your responsibility to keep your cash safe, not just in the interests of profitability, but in the interests of the welfare of staff and customers who could be caught in the cross fire of armed robbers who almost always, get to know what you have been up to!
According to Richard Phillips, joint CEO of Cash Connect Management Solutions, cash automation is the way to go. “Automated cash handling saves money and time, allowing retailers to focus on their core business and greatly improves their risk profile,” he says. And don’t think your enterprise is too small to automate, as cash, whether small or large in volume, remains high on the criminal agenda.
But the real commercial advantages of cash automation are often hidden by safety and security considerations. The advantages of an automated cash handling solution are and should, do much more than giving your cash a safe ride to the bank. Just have a look at what the Cash Connect solution, arguably the most advanced of its kind in the local market could do for you:
Bill Gates once said that automation applied to an efficient operation will magnify the efficiency. It is certainly true for automated cash management. It’s fast, accurate and error free. It eliminates all staff touch points associated with manual reconciliations and banking, which gets rid of shrinkage and double count supervision. It lowers insurance and other overhead and back-office costs, along with your exposure to crime, both in store and en-route to the bank.
With the right solution, your cash will reflect in your bank account on the same day that the cash-in-transit company collects from your premises. Cash Connect goes even further with its Instant Access feature, which allows access to the cash while still in the vault, converting the retailers’ cash into value whenever they need it.
Cash Connect guarantees the cash from the time it is deposited into the cash vault, whilst in transit and until the cash reflects in your bank account. This means that from a cash flow point of view, your business can not only survive most crises, but that business continuity is guaranteed.
In a manual cash handling environment, the combination of all the elements required to give effect to realising value in one’s bank account will vary with the actual monthly cash turnover; But on R1,5 million of cash receipts a month, the cost will be somewhere in the region of 135 basis points.
A corresponding integrated automated cash management service will cost in the region of 70 basis points.
As a matter of interest, card transactions cost the retailer anything between 300 and 500 basis points – reinforcing why, for the retailer, cash is the preferred medium of payment.
Imagine applying for a business loan, getting funding approval in one hour and having R1,8 million paid into your bank account within 24 hours. Far from a pipedream, this is what Cash Connect recently did for one of its retail supermarket clients under its Cash Connect Capital offering. You too can get fast, flexible, hassle-free, and unsecured growth finance when you need working capital to boost your business.
Having grown Cash Connect from an entrepreneur’s start-up to the success it is today, the Cash Connect team remains driven by the desire to empower and enable South Africa’s SME community and retail sector, by creating a trading environment that takes businesses from a place of safety to a place of growth.
And in today’s modern world, that is exactly how entrepreneurs should think about cash management solutions and how they can improve business efficiency and cash flow.