Three Myths about Cash Management - Brink's US
3 Myths about Cash Management
29 May 2020 - 00:00:00
There’s no secret recipe for running a successful business. But there is a simple ingredient for improving operations and cash flow: making sure your cash is well-managed. It’s a component of running a business that’s often overlooked, but it can make a big difference in saving time and money. These are three common misconceptions that stop business owners from optimizing cash management solutions.
Myth 1: Cash is Dying, so Managing It Shouldn’t be a Priority
What do video stores, fax machines and flip phones have in common? They’re all outdated, and some say that cash isn’t far behind. But the evidence shows otherwise, no matter how much you’ve gotten used to swiping, clicking and signing for everything you buy. Cash is still the most widely-used payment method in the world. Plus, demand for it is on the rise, according to , and accordingly, it should remain top of mind among businesses.
All around the globe, there are people who rely on paying with cash for various reasons. Some can’t afford to open bank accounts. Others simply prefer to use cash out of convenience or due to privacy concerns. “At the retail/individual level, cash seems to be still indispensable for minor transactions (involving food supplies and groceries), personal security as a back-up, and small charitable organizations,” the World Cash Report says. Even so, certain businesses have attempted to go cashless, requiring payment via credit or debit cards. The results haven’t been pretty. Just look at the shakeup that Shake Shack’s caused.
Myth 2: Cash is Expensive to Have Professionally Managed
Cash may not be going anywhere anytime soon, but neither are credit cards. So it makes sense why many businesses accept cards as forms of payment. The downside is that processing credit cards can be costly, thanks to interchange and processing fees. These can cost businesses anywhere from 2 to 3.5 percent per transaction.
“The credit card companies and banks have done a masterful marketing job,” says Rohan Pal, Brink’s Senior Vice President, Chief Information Officer and Chief Digital Officer. “They have convinced consumers that the convenience of using a credit card far outweighs any of the other risks that may go with compromising your identity or storing things digitally. As a result, the retailers in the middle are being squeezed, since the banks and the credit card companies can charge much higher rates for managing credit than theoretically you might be charged to manage cash.”
Professional cash management, on the other hand, doesn’t have to break the bank. There are a number of solutions available to help bring down the total cost of managing physical cash. At Brink’s, we offer Brink’s Complete, an all-inclusive subscription service that allows you to manage your cash for around just 1% of your cash transactions. Whichever solution you explore, be sure to consider all of your costs, including physical handling and bank fees, in order to understand how the solution can add more value to your bottom line.
“Some credit card companies, their position is that retailers shouldn’t accept cash,” says Christine Edel, Senior Director of Product Enablement at Brink’s. “They argue that cash is too expensive to manage; that it’s risky to your business and complex, while credit cards are seamless. At Brink’s, we’re showing retailers that it’s as simple or even simpler than credit cards.”
Myth 3: Self-Managing Cash is More Cost-Effective than Using a Third Party
Picture this: you have an important handwritten letter that you want a friend or relative to receive. You have two options for delivering that letter – you can either go to the trouble of hand delivering it yourself to the recipient’s home across town, or you can pay 55 cents for a postage stamp to mail it instead. Hand delivering the letter yourself will take more planning, since you’ll have to take time out of your busy day to drive to the recipient’s home and deal with the hassle of traffic. But for a mere 55 cents, you could simply let the Postal Service handle everything and save time.
Think of cash management companies like the Postal Service – they exist to make things run smoother and more efficiently for you. Yes, there’s a cost involved, but your time is money, too. You’ve got to take into consideration the total time and costs that come with hand delivering deposits to the bank. A store employee or manager has to take time out of their busy day to prepare deposits and drive or walk to the bank, increasing the risk of loss or theft. Additionally, deposit feescharged by banks can quickly add up and impact a business’ bottom line. And tapping into earnings from those deposits is out of the question until said deposits clear.
Imagine how much less stressful it would be if deposits were made in-store from the convenience of an app, and you could have next-business-day access to deposits for working capital needs. Your employees wouldn’t have to leave the store and could focus on handling other aspects of the business instead. That’s a win for any business, and it’s far from just an idea – it’s a reality when you introduce technology into your cash processes.
Cash in with the Cash Management Experts
Managing your cash well is a worthwhile form of investment for your business. And at Brink’s, we’re revolutionizing cash management to make it easier than ever for you to improve your cash flow and operations. Discover for yourself just how we can help your business succeed.