Retail is a tough, dynamic, and highly competitive world. The right cash handling procedures and technology can become the key differentiators for a retail store to achieve efficient and effective operations. Here are the best practices that can be employed by retailers to make their cash handling process better:
Develop and enforce standardized policies and procedures
Retailers must create standard operating procedures to handle cash in the store. Once the procedures are developed, related rules and policies must be listed for employees, store managers, and staff members to follow. These policies relate to when to change the cashier at the POS, when to prepare deposits, when to count the cash, and when to make bank deposits. Retailers can create a handbook for standard procedures, rules, and checklists, which must be reviewed and certified daily by managers to ensure adherence to the rules and accountability.
Invest in effective cash management technology
Cash security is a key concern for most retailers, and hence an optimum amount of cash must be kept at the store. Nonetheless, the right cash management technology can help the retailer improve cash handling in the retail store and maintain its security. Smart safes or currency counters are secure, can count cash faster, and ensure error-free cash handling. Some of these solutions can track the cash levels, detect fake cash, and also validate transactions.
Implement a robust POS
A strong point-of-sale system (POS) is essential, as it is the system through which cash comes into contact for the first time with the business. Such a solution must systematize the cash handling, provide paperless receipts to customers, and integrate cash logging tools and recyclers.
Train the employees
Once retailers employ standardized procedures for cash handling and cash management technology, the next step is to train the employees to use this technology. Employees must be aware of all the processes involved, the rules to use the technology, and the steps to avoid keeping cash safe and secure. They must learn to identify fake notes, use POS, and use proactive controls to make no errors.
Have the right number of staff members
Retailers must ensure that the number of employees in the retail store is enough to deal with the work going on at the same time, such as handling customers, inventory management, and supervising the register. Too many staff members lead to clutter and increase labor costs, while too few employees may result in overworked staff, poor customer services, and no staff for a particular activity.
Even if POS and advanced cash management techniques are used, enough documentation is required for effective cash handling. It helps the retailers to find the mistakes, identify the source, and correct them as soon as possible to reduce the negative impact on the business. Furthermore, an annual audit is conducted for every business to assess the tax liability and other regulatory and financial compliance. If retailers ensure accurate and good accounting and record-keeping in place in the store, these assessments turn out to be correct, and hence no penalties are imposed.
Allocate fewerstaff members for cash handling
Retailers must not allocate the task of handling cash to multiple people as it may lead to confusion, difficulty in tracking, and higher exposure to risks. Retailers must authorize only a few people to handle cash at the store. The number of cashiers must be enough so that the work is managed effectively, and tracking incidences of cash mishandling becomes easier. Furthermore, a person who started the cash handling for a day must close the accounting before the shift ends to make the operations efficient.
Perform frequent reconciliation
It is a busy day for retailers, and amidst handling the day-to-day operations, cash management might be ignored, thereby leading to increased exposure to risk. Therefore, retailers must implement enough checks and balances at every stage to reduce the probability of errors. Such checks and balances include:
Retailers must work towards implementing all of the above-mentioned best practices for effective cash handling at their store. This will ensure that frauds, threats, and errors related to cash are addressed, and vulnerabilities are identified from a financial standpoint. Before that, they must ensure that the managers and employees understand the importance of cash handling and make it a priority task to keep the cash flowing in the business securely.