Running a profitable business hinges on minimising expenses and boosting income
“Running a profitable business hinges on minimising expenses and boosting income. Traditional cash handling methods not only drain business resources through increased overheads, but also creates a risk for theft, cash shortages and armed robbery.
Fortunately, today we have a more holistic cash management solution that offers enhanced security, lower overhead costs and improved productivity,” says Richard Phillips, Joint CEO of Cash Connect Management Solutions. It’s now up to the retail sector to make the necessary adjustment to the way times have changed in doing business.
Business owners need to examine the cost and risk that traditional cash management processes pose. These procedures produce a greater margin of human error and more valuable man hours lost in the process.
First the currency and coins are received and counted by one person and then confirmed and reconciled by another. With these manual methods, businesses are taking two people (sometimes more) away from other primary tasks to count and reconcile cash payments and to prepare bank deposits.
Saving on back office overheads of 25% and more can be achieved by cutting out manual cash counting and management processes.
While retail security practitioners indicate that more than 90% of business robberies are executed with the help of insider-participation, the multitude of hands involved in manual cash processes also create additional risks such as fraud, theft and shrinkage.
Once at the bank, the cash is counted again and validated to check for any fraudulent notes. During this process, standard over-the-counter deposit fees apply, giving the business owner no room to negotiate any bulk cash deposit fees upfront. Cash management service providers are able to offer business and retail owners competitive cash deposit rates which are proportionate to the value of the cash being deposited.
“A business’s exposure to violent, armed robbery is increased directly proportionate to the amount of readily accessible cash either in the tills or in the back office. In South Africa alone cash is the target in over 95% of armed robberies in our retail sector. Cash remains the most used and widely accepted form of payment in the world and for as long as it is handled in a traditionally manual way it will continue to be the number one target for criminals,” adds Phillips.
Business owners with manual cash management processes also face the reality of high insurance costs with limited cover for the cash on the premises and on its way to the bank. For example, for a business that processes R1, 5 million in cash over a 30-day trading period, the cost of in-store cash insurance averages out at 1.25% of the maximum value insured per event. Assuming that the maximum value is R100, 000 at any one time the cost is about R1, 250 monthly.
Business owners also need to guarantee that their insurance policy includes cover while the cash is being moved from the business premises to the bank. Unless the customer specifically purchases insurance against any form of loss and for a fee over and above the cash in transit service fee, it is more than likely that no such cover exists.
The option of the value of the cash deposits being fully guaranteed from the time the cash is deposited into a robust cash acceptance device that represents a meaningful deterrent to attack, and until it is reflected in the bank account, is available to business owners and retailers and should be explored for greater peace of mind.
Phillips adds that these are just some of the challenges faced when employing a traditional cash management system. With the latest technological advances made in the cash management solutions industry, cash handling for businesses no longer needs to be such a risky concern. Today we offer cash management solutions that encompass high-tech, automated cash management processes that include in-store protection, transit logistics, shrinkage control and guaranteed value as well as a complete cloud based administration system that keeps the store manager on top of his cash receipts on a real time basis. It’s now up to business owners to take advantage of this technology.
About Cash Connect
Cash Connect Management Solutions offers an end-to-end cash management solution that encompasses cash in transit logistics, security management and cash processing. Established in 2006, Cash Connect’s specialist solutions for retailers remove risk and maximise cash flow through swift settlements. The company services more than 1,100 sites processing over R2 billion a month and has been endorsed as the approved service provider to blue-chip companies such as Spar Group, Shell, Engen, Pick ‘n Pay and OK to name but a few.
The executive management team - led by joint CEOs Richard Phillips and Steven Heilbron - has an unrivalled pool of specialised cash logistics, security and banking experience. The board of directors is chaired by Ivan Epstein, CEO of the Sage Group AAMEA (Africa, Australia, Middle East and Asia).
Cash Connect is a private company, with Old Mutual’s specialist fund, Futuregrowth Asset Management, as its largest institutional shareholder.
Idea Engineers on behalf of Sumay Dippenaar: Cash Connect
Tel: +27 11 010 4300 / 083 286 2799