Take a close look at how your company handles cash, and you may realize there are some efficiencies to be gained.
As a retailer, you know that processing the cash received at your store can be time consuming, and in some cases costly, depending upon how much you rely on your bank for this service. This month, Cindy Pease, division control manager at Macy's West, and Scott Meeker, VP/general manager of FKI Security Group, discuss effective cash handling processes and how FKI's Perfect Cash product has helped Macy's.
Aren't investments in cash handling infrastructure simply a necessary business expense?
Pease: Investments in cash handling infrastructure are a necessary business expense. The issue becomes how you build the infrastructure to get the highest efficiency possible for cash management and what balance you strike between the use of manpower and affordable technology. Finding the right formula will positively impact any company's ROI.
Meeker: Cash handling at Macy's has traditionally been viewed as a cost center that must be managed on a daily, weekly, and monthly basis. Any changes to the processes, whether labor-based or fee-based, are always analyzed from an ROI standpoint.
What kind of payback can Macy's expect?
Pease: Payback in the cash management world should be realized in 18 months or less. I like to see benefits happen in 6 to 10 months usually. It depends on the overall size of the expected return.
Meeker: Using the FKI Perfect Cash product, Macy's can expect a payback of 12 to 15 months.
How can an efficient cash handling procedure impact a retailer's ability to manage revenue?
Pease: The faster that cash tender is recycled or deposited without shortage, the better. Technology eliminates cashier error and, if designed correctly, provides less opportunity for theft. The less you give the bank to do, the more money you save.
Meeker: Macy's cash handling system reduces daily cash on hand, armored car fees, bank fees, and labor costs, all of which should have a positive impact on store revenue.
What is the impact of FKI's cash handling solution on Macy's cash room operations?
Pease: FKI provided a customized solution for automating the deposit process and creating register replenishments, reducing processing time by 50%. The technology supplied can combine all of the functions and works in a similar but smaller scale than that of a bank or back office casino process. Savings are realized through reducing the time to process and increasing accuracy.
Meeker: A cash handling system improves processing time, freeing up labor that can be applied elsewhere. Cash exposure is also minimized, which should reduce loss due to shrink.
How has Perfect Cash impacted Macy's expense and management of cash handling labor?
Pease: The bottom line is that less supervision is needed. Change replenishments normally needed throughout the day have decreased, and associates have more time for customer service-related functions.
Meeker: This product is an enclosed system, combining the preparation of opening tills, verification/preparation of end-of-day deposits, and general ledger reporting. Automating these three processes, which have historically been very labor intensive, has significantly reduced the direct labor portion of Macy's cash handling.
What kind of theoretical results statements could a typical retailer make a year after deploying the solution?
Pease: Investments in state-of-the-art cash management systems pay off quickly and allow the retailer more avenues to grow the business by keeping costs down. Good systems make cash management invisible.
Meeker: Using a cash management system allows retailers to improve the accuracy and flow of cash receipts and reduce the associated costs, from the point of sale all the way through to bank deposit.
What features should retailers look for in a cash handling solution?
Pease: Most important is the ease of use. You want operators proficient with minimal training and supervision. You want the hardware to have a long life and the software to be easy to upgrade. The system should be able to integrate into back-of-house systems for feeds and reporting. Also, you want system control features that deter theft and even discourage the thought of theft.
Meeker: Retailers today experience high turnover. A system must be user friendly and have high reliability and durability. It should also have a relatively open architecture for integration with legacy systems and allow seamless upgrades.