5 Cash Management Solutions for Small Business Owners

5 Cash Management Solutions for Small Business Owners

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According to The Federal Reserve, there’s more cash in circulation today than ever before, with nearly $1.56 trillion as of July 2017. 43% of the U.S. population does not have a credit card, 20% do not have a debit or credit card, and nearly 20 million Americans have no bank accounts. Despite the continued growth of electronic and mobile payments, the amount of cash used at businesses today means many businesses are still very cash intensive.

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Cash can require far more labor intensive procedures when compared to managing electronic payments, such as having to spend time counting, sorting, depositing, reconciling, verifying, and preparing the cash. You’ll have to make bank runs, store the cash securely, pay higher insurance premiums to cover the risk of having a lot of cash on hand, secure for internal theft, all of which add to operational inefficiencies and costs.

Cash Management Solutions

When business owners get fed up with these inefficiencies, they can turn to cash management solution providers to transfer the labor and liability-related costs off of their organization and onto the cash management experts. There are four main cash management solutions, most of which are offered in bundled packages and sold to cash intensive businesses as a service package.

1. Armored Truck Service (Note Pickup and Delivery)

In the United States, the major armored carrier players include Brinks, Loomis, Dunbar, Garda, and G4S. This service is where the armored carrier will deploy an armored truck to the merchant’s location to physically pick up notes and then transport the contents back to a money processing center of the armored carrier.

At said processing center, the carrier will process the contents on behalf of the bank (using a dedicated vault). In addition to doing a pickup, the armored carrier can also drop off notes to the location for the merchant’s change fund operations, or to fill up the merchant’s ATM machines.

2. Smart Safes

A Smart Safe is an advanced operational safe that automatically counts, verifies, records, and deposits the dropped cash amounts to the merchant’s bank account the next business day, via a procedure known as “daily bank credit.” This advanced operational safe can detect counterfeit notes, and print off customized reports not just from the Smart Safe’s menu board, but also through an online reporting portal that a merchant can log into and view all cash sales, credits, and other reports in real-time. Major Smart Safe manufacturers include Tidel Engineering, Fire King Security Group, and Armor Safe Technologies.

3. Note Dispensers

Note dispensers are typically utilized by higher volume locations that might need to dispense notes for various operational purposes. Using the note dispenser can also allow for higher levels of security, as excess notes and coins can be stored securely in the dispensers, rather than being stored in other areas of the business. Tidel Engineering is a major note dispenser provider.

4. Cash Recyclers

Cash Recyclers are also typically utilized by higher volume locations, especially those with multiple checkout lanes (such as a large supermarket). This technology helps to streamline many back office operations such as end of day balancing, bank deposit prep, till prep, and more. Major cash recycler providers include Tidel Engineering and Glory.

The Bundled Package

To bring it all together, armored carriers will usually partner with financial institutions and cash management technology manufacturers to provide a bundled cash management service package to cash-intensive businesses. Also included in this service package is a maintenance policy that’s purchased on the side by the armored carrier, which provides peace of mind when it comes to maintenance requests on the technologies. The bundled package typically includes:

  • A cash management technology, based on the merchant’s needs, a customized Smart Safe package is designed, along with any value added technologies that might be required for the location including dispensers, cash recyclers, etc.
  • Daily credit deposits via the financial institution
  • Online reporting technology
  • Technology maintenance policy
  • The armored carrier will guarantee the physical contents within the technologies as well as service the technology deliver change fund orders

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About the Author — John Tucker has over ten years of professional experience in Commercial Finance and Business Development. Tucker is also an M.B.A. graduate and holder of three bachelor's degrees in Accounting, Business Management, and Journalism. To connect with John Tucker, feel free to send him a connection invite via LinkedIn at: www.linkedin.com/in/johntucker99

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