Is your organization stepping over dollars to pick-up pennies?
Cash is king, well, cash used to be king. With an overall decline in the use of cash, many retailers are left with outdated processes for in-store accounting. Retailers are spending significant amount of time in each location, counting less money and tracking down loss that is less than .03%. If your organization is looking to make a change to cash office procedures, ask yourself the following questions:
- Has your team created the most efficient process?
When the decision is finally made to make a change, many are jumping quickly to technology before evaluating and streamlining processes. We aren’t trying to sway you away from technology, however we have observed many technology offerings are building in process-change benefits that are unrelated to the technology upgrades. We recommend that the first step in a cash handling process change is to evaluate and streamline the process to evaluate a fair ROI on any additional technology investments.
- Should all stores be created equal for cash handling?
Stores are typically treated as “individuals” when it comes to labor, management structure, and SKU rationalization, however often when it comes to the time, process and frequency of cash handling processes, retailers treat this as a fixed activity for all locations. Retailers should evaluate the frequency of cash handling operations and armored car pick-up schedules to right-size for each location. By differentiating locations and creating the appropriate schedules, retailers may be able to save millions of dollars.
- What technology is available to assist?
Scales: Starting with the basics, there is a lot of value in leveraging scales in cash offices. Most large retailers have already implemented this technology to some degree, however we have observed inconsistent levels of acceptance, specifically from the more tenured cash office associates. There is also opportunity to evaluate the extent in which scales are integrated into the process and the ROI of using scales more holistically.
Software: We have observed many retailers using excel and some even leveraging pencil and paper to count and balance their store. Often, a cash handling solution may already be available in their POS suite or available at a nominal fee. The key to selecting which software is correct for your organization is to ensure the integration reduces the complexity and time of the process. With the amount of information now available through the POS, complex cash office processes are not required.
Smart Safes/Cash Recycler: Smart safes have been a long-time solution in the C-Store industry and are making more of an appearance in other areas of retail. Smart safes will significantly reduce the time and frequency in which any money in the store needs to be handled/counted. Furthermore relationships with armored car carriers and banks have sweetened the deal by improving the access to cash. What is the downside? Space, location and ROI. Some retailers have a difficult time finding space to hold the machines in a retrofit situation. Depending on the store design some stores may find that they are left placing these on the sales floor. Additionally, we have found that depending on the size of the investment (hardware and software integration) a lot of the labor savings can be achieved with process changes; technology is not the enabler.
- How does our organization handle change?
Most retailers have experienced, dependable associates or managers completing the cash office procedures. This is good, however can make change in the cash office more difficult. It is possible to teach an old dog new tricks, but planning for this challenge will be essential to a successful rollout. Time and time again, we hear cash office associates say the following:
“I’m supposed to use the scale, but I’m faster than the machine”
“I don’t trust it”
“I’m not supposed to search for amounts under XX dollars, but I want it perfect”
“We double or triple count because there was an error XX years ago”
Bottom line, the folks completing cash office tasks are those you want in your organization. Strong, detailed and committed to the company. However, it is important to help educate your team on the bigger picture to ensure success and sustainability; we don’t need associates spending hours to research insignificant overages/shortages.
With over 90% of Americans still using cash for some transactions, in-store cash handling processes are still required. However it is time to take a look at your organization to ensure this is being completed the best way for your organization. If you feel that your team can benefit from improved cash handling procedures, contact the Stores Consulting Group for more information. Contact Us