What Can Impact Working Capital?

Companies operate in all kinds of different ways, but most of them have one thing in common: they rely on working capital, or the money they have available to meet their short-term obligations. If working capital amounts are too low, a business could risk operations freezing up, but if they’re too high, it could miss out on growth. If your business is still managing cash manually, here are four challenges you might run into that could affect working capital.

1. Deposits made at the bank have to be made according to business hours

On weekdays, deposits made at the bank will usually only clear the next business day if they’re received before the end-of-day window cutoff. Cutoff hours tend to vary from bank to bank. The reality is that your employees in charge of making traditional cash deposits often have a laundry list of daily to-do items before they can leave the store and head to the bank. As a result, not making it to the bank on time can cause frustrating delays in accessing cash. 

2. Bank deposit fees can drain margins

Everything comes with a price, and for businesses, that includes deposits made at the bank. The more cash your business takes in, the more banking fees may erode margins and reduce the funds your business has available. Much like how cutoff hours vary depending on the bank, so do fees: a smaller independent bank may charge one amount, while a larger bank with thousands of locations may have a completely different fee structure in place.

3. A single robbery can create a major funding shortfall

Depending on how frequently your business makes deposits at the bank, a robbery of the store’s safe (or of the employee transporting the money) could instantly wipe out more than a week’s worth of revenue. To cover expenses in such a short amount of time, if you’re without reserves, you might be forced to pay fees to lenders. It doesn’t help that criminals have become emboldened as of late: over 69% of retailers surveyed said the COVID-19 pandemic resulted in an increase in fraud, crime, and overall risk.¹ Additionally, 61% of respondents mentioned an increase in workplace violence, and 57% noted an increase in organized retail crime.²

4. Labor costs are getting pricey

With inflation at an all-time high³ and labor costs on the rise, the saying, “Time is money” rings truer than ever. Wages and salaries increased 4.7% from March 2021 to March 2022.⁴ So, while it’s important for every business to have qualified employees, the more tasks they have on their plates, the more expensive it is for businesses. Many employees find themselves working late as they juggle their regular in-store duties with handling manual cash management tasks, like counting cash, dropping deposits off at the bank, and reconciling cash drawers.

Brink’s Direct Credit: an integral part of Brink’s Complete

Brink’s Complete is an all-inclusive solution that allows you to simplify cash management and deposit cash into a smart safe installed in your store. A key component of Brink’s Complete is Brink’s Direct Credit, which gives you next-business-day credit to the bank account of your choice.

By eliminating bank trips, you can reduce bank deposit fees, your employees can save time and drop cash into a smart safe whenever it’s convenient for them, and you can reduce the risk of robbery, theft, and shrinkage. Find out more about how Brink’s Direct Credit can help you access working capital seamlessly.