Technology's impact on business operations continues to transform managerial controls and measurement while providing for profitability enhancement opportunities. Technology in the retail environment has predominantly focused on point of sale systems that integrate everything from transaction accounting to inventory management. Recently, retailers and POS system companies are focusing on the integration of cash handling with the POS system.
More progressive retail operators have already replaced traditional drop safes with cash management system — which incorporates the traditional benefits of a safe, such as robbery prevention and time-delay-change funds, but also employs bill-and-coin-handling technology, as well as its own operating system. Today's cash-management systems connect to corporate networks to facilitate data exchange and remote management.
Profitability enhancement
The cost of a CMS is very quickly recovered through the recurring savings garnered by the system itself. What initially may appear to be a "cost" quickly becomes a "profit generator" that produces annualized cash and non-cash savings. Typical systems pay for themselves within six to nine months, yet continue to produce savings indefinitely.
Retailers have found recurring cash savings in many areas. Specifically, internal theft is dramatically reduced; detection and rejection of counterfeit currency is improved; and armored car requirements are reduced. The latest and most exciting area of cash savings is now being gained through the retailer receiving "provisional credit" for funds in the CMS that have not yet been deposited at the bank.
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Non-cash savings include a reduction of management time previously required to reconcile the transaction log with cash and preparation of bank deposits, as well as instant accounting and deposit preparation.
Deployment
Deploying a cash management system involves support and coordination among multiple departments, including finance, operations, information technology, security and loss prevention. And choosing the right CMS provider who can coordinate the physical and technological installation of the system can significantly expedite and smooth the process.
Each department should carefully consider features and functionality that will be required for a successful deployment and utilization of a CMS.
Below is a list, by corporate function, of features and functionality that should be considered or required.
Finance:
- Instant access to all information pertaining to cash in the safe
- Tools to access one or more stores and data, and place it in a spreadsheet
- Guaranteed deposit by CIT
- Provisional credit by the bank, with money deposited to the account, regardless of whether it's picked up or still in the safe at the store
- Cut down on armored pickups, since credit is given by the bank
- Automated cash reconciliation – no manual counting
- Eliminate cash shrinkage by linking the safe and the POS
- Lower the cost of buying coins and notes by recycling both
- Lower the cost of coins by not buying coin rolls; use bulk bags
- Elimination of cash counting at the beginning of the shift
- Where cash rooms exist, eliminate 90 percent of the labor
- Cost of annual software maintenance (get a five-year quote)
- Cost of annual hardware maintenance (get a five-year quote)
- ROI for any investment should be less than 1 year
Operations:
- Eliminate cash shrinkage by linking the safe and POS
- Balance each transaction between the safe and the POS
- Simple computer-based training provided
- Operate in the native language of each cashier to eliminate errors and make the system easier to learn and use
- Dispense flat notes that are easy to handle instead of rolled up notes
- Auto dispense each till (no cash-room counting) at start-of-shift
- Auto bank-out of each till (no cash-room counting) to end shift
- Speed time for cashiers to clock in and be on the lane
- Quick access to cash to replenish tills with coins and notes
- Eliminate counterfeit notes while customer is present
- New notes are validated the day they come out by updating the note validators over the network — no delay waiting for updates
- Totally eliminate cash counting and get deposit guarantees from CIT
- On-site service call by next business day at a minimum
- Help-desk diagnostic tools to help solve technical issues
- Highly qualified service organization capable of analyzing the network
IT:
- Must run an industry standard operating system, such as Windows, and use XML
- Must have the ability to plug and play over the store's Ethernet network
- Tools included for data collection over the network
- Report-writer tool for creating and changing reports
- Modern hardware architecture, easily told by integration (one power cord)
- Must interface with POS at transaction level to stay in balance
- No programming required to create a total CMS environment
- Update CMS application over the network for new releases
- Up-to-date note validators over the network when new notes are released
- System diagnostics for help desk to support store personnel
- Supplier has 24/7 help desk to support customer help desk or store directly
- Hassle-free system that will not take IT resources to manage
Security:
- Must interface with store's alarm systems
- Must interface with store's camera systems
- Must support a transaction log for up to 90 days so events can be analyzed and then used to search camera videos
- Eliminates chance of an entire safe getting stolen
Loss prevention:
- Balance every transaction with POS
- Automated cash reconciliation (no cash counting)
- Cashiers check in/out tills with no management assistance
- Time-delayed access to all vaults
- Additional vault for storage of change or high dollar items
- Instant access to note validators for CIT guards
- Audit trail to balance every penny of every cashier
- Audit trail for all transactions for past 90 days
- Eliminate counterfeit notes
- Updated note validators over network when new notes are released by local government
- Guaranteed deposit by CIT company
- On-site repair service by next business day
Implementing a CMS solution is a decision that will impact your company from top to bottom. Each department's needs must be considered early in the process. When evaluating potential CMS suppliers and their systems, you should prepare a checklist that addresses all of their unique needs and use this checklist during your information gathering and quote processes.
Ed Grondahl is the marketing manager for Tidel Engineering LP. To submit a comment about this submission, please e-mail the editor, Tracy Kitten.
