Not sure what software, technology, and processes are involved in an effective cash management system? Leading providers like Integrated Cash Logistics offer fully integrated solutions that give you a streamlined way to manage your cash operations.
A good cash management system should simplify how a business handles their cash, not overcomplicate matters, and make it harder for them to access their funds. Below, we’ll discuss what an effective cash management system looks like, the technology behind it, and how an all-inclusive solution makes it easier to control your cash.
- Cash Management System Traits
- Cash Management Technology Componenets
- Common Frustrations
- Benefits of Cash Management Systems
- Your Cash Management Solution
Learn more about Integrated Cash Logistics Cash Management Solutions
The Traits of an Effective Cash Management System
Effective cash management provides businesses with several benefits. Namely, it helps leaders understand what’s flowing in and out of the business and makes it easier to track cash transactions and bank deposits accurately.
These solutions also offer more strategic advantages, like removing the liability of cash handling from the business and streamlining financial operations for enhanced productivity–even amid staffing shortages. When running properly, a cash management system should provide:
- Clarity on cash flow in and out of the business
- Accuracy in cash reporting
- Centralization in cash management
- Less liability
- Better productivity
- Improved profitability
Key Components of Cash Management Technology
A cash management system involves various technologies and procedures to help companies efficiently capture and transport cash, make deposits, and track and forecast cash flows. These systems often integrate smart safe technology and sophisticated software to streamline operations and improve security.
Unlike traditional methods, which rely heavily on manual processes, modern cash management systems like those with smart safes provide a fully managed solution. They not only enhance the speed of access to funds but also minimize exposure to fraud and theft, and simplify reconciliation for businesses.
To fully understand what to look for in a cash management solution, read on about each key factor.
ICL’s software-first CashSimple® solution streamlines everything from change orders to tracking deposits.
Hardware
Any cash management system requires a few physical pieces of hardware to handle transactions, process payments, and protect cash until depositing it in the bank. This might include the company’s cash registers, cash counters, cash recyclers, and safes, which we’ll explore in further detail.
Smart Safes
A smart safe is an advanced security method for storing and monitoring cash. Unlike a standard safe, which simply locks cash away until it’s manually transported to the bank, a smart safe includes more innovative features. This includes counting the cash that’s fed into it, assessing the portion that should remain on-premise or be deposited, and keeping detailed logs of who is accessing the safe and for what purpose.
Automated Cash Handling Machines
Another piece of cash management technology is an automated cash-handling machine. This might include a bill or coin counter that companies can use to automate cash counting rather than complete this tedious task by hand. Not only can these automated machines save valuable time, but they can also reduce the risk of human error and enhance accuracy.
Software
Cash management systems also rely on various software programs to monitor real-time cash flow levels, enable accurate financial reporting, and provide tangible insights and suggestions to support optimal financial management. Accounting software, point-of-sale systems, and dedicated cash management solutions can facilitate this.
Cash Management Software
One of the most important components of these systems is the dedicated cash management software, often integrated with hardware like smart safes. This software supports cash management automation by enabling remote cash capture, automatically counting cash when it enters the safe, and providing real-time deposit data and flexible reporting.
Cash Handling Processes and Policies
Businesses must establish processes and procedures that dictate how cash will be handled and who is responsible for making deposits to implement a good cash system, beyond the hardware and software. These policies help to standardize the cash management process, reducing the risk of fraud and error and helping businesses have quicker access to their deposits.
Employee Cash Deposits to the Bank
Some businesses will arrange for a manager or owner to deliver cash deposits to the bank. While this doesn’t require the company to involve any outside providers or pay for their services, it can take away from the employee’s time at work that they should be spending with customers or their teams. Plus, it can increase the risk of burglaries or theft from internal or external actors.
Armored Cars and Cash Pickups
It is common to hire an armored car service for cash pickups. These providers regularly pick up cash deposits and deliver them to the bank, making any necessary change orders and subsequent deliveries. Using an armored car service can help businesses eliminate trips to the bank and reduce the risk of having an employee handle large amounts of cash with minimal oversight.
However, one of the biggest challenges of armored car services is they often run late which disrupts business. It also delays deposits from reaching your bank account and can complicate reconciliation of your accounts. Additionally, unexpected fees and surcharges and uncertainties about who to contact regarding discrepancies can make matters more complicated.
Employee Training and Compliance
Regardless of the method businesses use to transport their cash and make deposits, businesses need to keep employees well-informed on their procedures and cash handling policies. Providing thorough compliance training and education on proper cash handling practices can help businesses avoid shrinkage by mitigating the risk of employee theft, fraud, or reporting errors.
From retail to restaurants and banking, CashSimple® is the right solution for any industry.
Common Frustrations With Cash Management Systems
The traditional method of cash management is often tedious and time-consuming and prone to human error, theft, and fraud by bad actors. When cash counting, change requests, and deposits are all handled by hand, there is a high risk of inaccuracy. Managers must spend a significant portion of their days overseeing this process and ensuring they have enough cash on hand to support daily operations.
Even modern cash management systems that claim to help businesses streamline financial operations can cause further inefficiencies and frustrations. Some of these systems may still require managers to spend hours each day traveling to the bank to make a deposit or have difficulties tracking cash levels across business locations. The following are some of the common roadblocks that businesses may face with their existing cash management system.
Inefficiency
Traditional cash management is highly time and resource-intensive and can drag on efficiency and profitability. Many systems require business leaders and managers to take time away from their core responsibilities. Instead they count cash deposits, manually enter data into their accounting systems, fill out the necessary paperwork, or drop off the cash in person at the bank.
Thus, if the responsible party doesn’t have the time to drop off the deposit one day, it could lead to cash flow problems when their cash levels aren’t properly reflected in their bank account. All in all, manual cash management is often an inefficient system that hinders their ability to grow sustainably.
Security Risks
Certain security risks associated with traditional cash management systems, both from internal and external actors are important considerations. These risks threaten a business’s profitability through theft and shrinkage. For instance, when access to safes isn’t properly managed or monitored, there is a risk that theft from employees goes undetected.
When cash deposits are transported to the bank by a manager or other employee, there is a further risk of fraud and inappropriate usage of business funds since they are not directly monitored. Plus, these individuals could be targets for theft or burglary by outsiders when transporting large sums of cash without the proper security.
Inaccurate Reporting
Ineffective cash systems can also lead to inaccurate financial reporting, making it harder for businesses to get a proper reading of their financial performance and cash position. Whether through theft, fraud, or honest human error during data entry, there are many reasons why financial reporting accuracy suffers.
Inaccurate reporting can cause a lack of visibility into a business’s cash flows, which can make it difficult to forecast future levels, determine the amount of cash needed on-premise to support daily operations, or prepare accurate financial statements.
Rising Fees
Traditional cash management solutions require businesses to handle all bank deposits and transfers themselves, which makes them susceptible to rising fees that can detract from their margins. Depending on the bank, they may charge business accounts hefty annual or semi-annual fees, which can increase significantly over time.
On the other hand, an effective cash management solution takes ownership of the business’s cash from the time it enters the safe, meaning they absorb any banking costs or fees on behalf of the customer.
Schedule a demo to learn how ICL’s cash capture technology simplifies how you control cash.
Benefits of an Effective Cash Management System
With an effective cash management solution like CashSimple®, businesses can enjoy a much simpler, streamlined process to control their cash. Rather than managing various software solutions, an armored car service, and separate hardware providers, Integrated Cash Logistics acts as the single point of contact for everything cash-related.
Real-Time Cash Tracking and Reporting
A primary benefit of an effective cash management system is that it provides you with better visibility into your cash flows and financial health. Rather than waiting until someone on the team has time to drop off the deposit at the bank or your scheduled pickup with the armored car service, an advanced solution offers real-time cash flow monitoring from the time you drop cash into the safe. This transparency allows for more strategic planning and purchasing decisions based on current cash levels.
Simpler Reconciliation
An effective cash management system can mitigate bank reconciliation challenges. These integrated solutions allow cash deposits to be automatically reflected in the business bank account in as short as one day. Thus, they can eliminate the need for manual cash counting, data entry, and record-keeping, which can create discrepancies between bank and internal records.
Security and Protection
A good cash management service will protect businesses from cash-handling risks like theft, burglary, or fraud. Once the money enters the safe, the cash management partner will take ownership by purchasing the balance from the business and organizing its transport to the bank, effectively ending the business’s liability. The business is not responsible for what happens to the cash once it’s dropped in the safe–all but eliminating their risk exposure.
Provisional Credit
Many cash-handling services use smart safes to offer provisional credit to businesses, which is a solution that provides them with quicker access to their funds. With this method, you enter cash into a smart safe, and information about the deposit is transmitted to the bank, which makes a provisional credit to your account. Once the cash is transported to the bank, they will verify that the funds in the deposit match the data transmitted by the smart safe and adjust the final deposit accordingly.
However, provisional credit is only one solution. A better alternative is to seek out a service that eliminates the need for provisional credit all together. With CashSimple®, deposits are purchased by ICL as soon as the cash enters the safe. Regardless of when the cash is picked up by armored car services, the money is within your bank account in 24 hours.
ICL does more to keep your cash secure – without provisional credit.
End-to-End Automation
Businesses can benefit from a cash management system that offers end-to-end automation to enable quick and efficient operations. Automated systems reduce the need for time-consuming, hands-on efforts to handle cash and effectively eliminate the risk of manual errors. As a result, businesses aren’t reliant on the availability of their team to process and transport cash deposits and can enjoy quicker access to their funds.
Easily Scaled Across Franchise
Another key benefit of an effective cash management system is that it’s easier to monitor and manage cash flows across various locations–perfect for franchisees. A fully managed cash management solution removes the burden of cash handling from the business, ensuring that it does not limit their ability to grow and expand, instead of coordinating with third-party vendors to ensure all franchise locations are properly serviced.
Integrated Cash Logistics: Your Cash Management Solution
Though many types of cash management services are out there, they don’t all offer the same benefits and peace of mind as ICL’s solution. Our CashSimple® cash management service includes end-to-end management of all things related to your cash, helping to eliminate the risk and complexity of this process. Simply put, once you drop cash into our safe, you end your responsibilities and liabilities, and we reflect deposits in your account on the next business day.
For more information on our CashSimple® solution, contact us or schedule a demo to see it in action.
Fully-Managed Hardware and Software Solutions
ICL handles everything from the installation and maintenance of our safe to the integration and ongoing support of our software systems. In doing so, we ensure that all components of your cash management system work together seamlessly and reliably. In other words, all you have to do is drop the cash in the safe, and we handle the rest.
Alternative to Provisional Credit
Provisional credit is the most common solution for managing cash from deposit to the bank, though there can be roadblocks if there are any discrepancies when the cash is deposited at the bank. Luckily, provisional credit is not the only way. Integrated Cash Logistics does things differently by buying your cash from the moment it enters our safe, and a deposit for the cash conveniently arrives in your account the next day.
Centralized Cash Management
Our holistic approach means we understand the interdependencies between the various cash management components. Given our unique expertise, we manage all relationships and processes, so your only point of contact is ICL. The result is a simplified cash management system that only requires your team to transport cash from the register to the safe.
Better Flexible Banking
Our solution fully manages all cash handling once it is deposited into the safe, and your funds will be reflected in your account the next day. This means you’re not dependent on the availability of an armored car service to get your cash to the bank or be limited by provisional credits. CashSimple® offers a flexible solution as your single point of contact, meaning you can bank with who and where you want.
Dedicated, Proactive Support
When partnering with ICL, you have access to a dedicated team to address any issues or concerns related to your cash management software and technology. They ensure minimal downtime and optimal cash management, leveraging their industry expertise to keep your operations running smoothly.
