Reducing Your Cash Risk – The How And Why

Reducing Your Cash Risk – The How And Why

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From all-inclusive cash management systems, to simple safety steps at each point of cash’s journey through a business, there are many ways that business owners can improve the safety of their enterprises when it comes to cash handling.

For a cash-heavy business, the best place to start is to interrogate what happens at every stage of the business’ existing cash handling. Some helpful questions include:

  • Are the people that work with cash properly vetted in terms of credit and criminal checks and, if so, how often?
  • How much cash is kept in each till before it is cleared to a cash office or safe?
  • How is the clearing done — is it the cashier alone or are they escorted by security?
  • Are there cameras that allow the cash to be tracked from the floor to the cash office?
  • What type of access control is there for the cash office?
  • Is there camera coverage in the cash office and is the cash always under camera surveillance?
  • How is the cash counted and made up and who checks the deposit — is there dual control?
  • How do cashiers balance the till sales?
  • What happens to the cash once it’s been counted and prepared for deposit — is it secured in a safe?
  • What category of safe is used and who holds the keys to the safe?
  • Are there alarms covering all external access points (including the roof) of the premises and the cash office?

Related: Sidestepping Common Franchisee Mistakes

Vet your staff

One of the biggest areas of weakness in cash handling is untrustworthy staff members having access to and control over cash. From pilfering of the odd amount of cash here and there, to negligence when securing cash for transfer, or organised theft and sharing of safety information with outside parties who plan robberies, staff can undermine the safety of a business and its long-term profitability. The best way to mitigate this is to implement thorough and regular staff vetting.

From a management point of view, business owners can also reduce their cash risk by keeping the right amount of cash on hand and having cash collection or depositing systems in place that work for their size and type of business.

The amount of cash that is kept on hand for floats often depends on the type of business being run. A supermarket for instance, will generally need more coins and R10 notes, while wholesalers will need more notes than coins for customer change. The key is to find a balance between not holding too much cash on hand, while still ensuring that the business doesn’t run out of change.

Cash reconciliations should be done daily at the close of business to make sure that all takings are accounted for. To ensure independence, the reconciliation should be done by someone who is not involved in handling the physical cash during the day.

In addition to specific changes to different parts of the cash management process, business owners can also opt to implement an all-inclusive cash management system.

Reduce internal cash handling

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Cash management systems can vary, but most often include an automated device that counts, validates and verifies each note that is deposited. The device is linked to an electronic, often web-based system that allows the user to view all transactions that have been deposited and enhances the balancing and reconciliation process.

These systems are generally paired with a cash-in-transit service that can provide bank account credits as soon as the cash is collected. This allows the retailer to reduce the amount of internal cash handling and transfers risk to the third party security services company.

Cash management systems may even include closed till solutions where the cash is actually banked at the till and in certain instances, the staff never handle cash — cash is only handled by customers, who even directly receive their own change.

Related: The Legal Requirements For Your Business’ LifeStage

Strengthen security and efficiency

Unless the franchisor dictates the cash management policy for its franchise branches, there are many options available to franchisees to manage their bulk cash handling in a safe and secure manner.

Whether it’s an overhaul of the entire cash management process or modifying and improving a single aspect of a business’ cash handling, the benefits of increased security and efficiency are immense, not least because they can improve the success rate of sales made and cash reflecting in a final bank account.

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