5 QUESTIONS TO ASK BEFORE CHOOSING A CASH MANAGEMENT SOLUTION FOR YOUR BUSINESS
One of business magnate Richard Branson’s popular quotes reads, “Never take your eyes off the cash flow because it’s the lifeblood of business.” Even so, the average entrepreneur puts profit above the need to hold adequate cash to meet operational expenses. They overlook the benefits of an appropriate cash management solution.
Many businesses that record a strong bottom line suffer bankruptcy owing to a negative cash inflow, according to an article on Inc.com. Will your business remain operational in the long run? You can tell by how well you monitor your cash transactions and maintain a healthy cash flow.
Having a robust cash management solution is a must-have if you want to maximise your business’ profits and stay in business. From real-time cash visibility to faster cash processes, optimal cash inventory, and improved customer satisfaction, the benefits are extensive.
Cash management solutions come in different sizes and functionalities. It can be challenging to determine the exact technology that meets your cash management needs. What features should you look out for?
Here are five questions to help you sort from the scores of cash management solutions available and find your best fit.
1. How Can Your Cash Flow Be Improved?
Cash flow problems drive your cost of cash and eat into your profits. Begin by identifying cash flow processes that need streamlining.
You need to check on areas such as:
- Highly manual and erroneous cash processes
- Difficulty in keeping up with cash processes for multiple business branches
- Poor cash forecasting
- Keeping excess cash inventory
- High cash-in-transit costs
A smart safe, for instance, can automate, standardise and monitor most of your routine tasks to avoid human error and cash shrinkage. An industry-level smart safe comes with multiple functionalities, enabling you to:
- Track the inflow and outflow of cash
- Electronically calculate and validate money to prevent theft and long wait times
- Track cash data and trends for your cash forecasting and stocking needs
Decision-makers often struggle with financial reconciliation and visibility across multiple platforms. In March 2021, Forrester Consulting conducted an online survey of 163 finance and IT decision-makers spread globally and across industries.
The survey revealed that over 61% of decision-makers found it difficult to view, get accurate data analytics, and provide up-to-date cash flow and liquidity reports. Reconciling payments was also top among their list of cash management challenges.
When you are managing multiple processes, payment methods or operating systems, you need financial software that can integrate all your platforms. An intelligent cash management solution will enable you to integrate data on various platforms for smarter cash management and better decision-making.
2. What Cost Savings Will the Cash Management Solution Deliver?
Integrating world-class cash management solutions into your business constitutes a significant financial investment for your business. You want to make sure that you will get a positive Return on Investment (ROI).
Choose a vendor that can demonstrate successful results and ROI with the particular technology you want to take on. Some of the ROI benefits that you can look out for depending on the area of implementation are:
- Reduction in manual labour costs due to automation
- Elimination of human error and theft which reduces cash shrinkage
- A growing number of transactions signalling more efficient processes and increased business
- Lower cash inventory and cash-in-transit costs due to better cash forecasting and reporting
- Cheaper cost of insurance thanks to a lower cash risk profile
- Improved customer service, promoting customer acquisition and retention
3. Will the Cash Management Technology Fit Your Operations Now and in the Future?
Your business is unique and so your cash management solution should be as well. The ideal cash management system will blend into your business processes and needs now and well into the future.
Standard vs Customised Cash Management Solutions
When choosing suitable technology for your business, you can either consider the latest standard cash management solution or go for tailor-made technology. Sometimes, you will not find standard technology that matches your business. In such instances, you need customised cash management solutions tailored to your unique needs.
4. Is the Cash Management Solution Easy to Use?
Change is uncomfortable for most people, especially if it comes with a steep learning curve. When introducing new technology to your business, make ease of use one of your primary considerations. If users take too long to accept or understand technology, they will delay your ROI.
A smart safe, for instance, should have a fast and efficient user interface. Some of the user-friendly features of an ideal smart safe include:
- Easy to read typography
- Use of simple language
- Ease of navigation through menu commands
- Note validation features
- A built-in printer to print receipts when needed
- Easy serviceability to prevent delays when the device needs fixing
- Reliable and secure connectivity, preferably an Ethernet connection with a backup WiFi connection
The best vendor will also provide you and your employees with on-site training to ease the process of adapting to new technology.
5. Is Your Technology Secure and Does it Meet Regulatory Requirements?
How safe and compliant is a cash management solution? Not just to secure your cash but also yours and your customers’ confidential and sensitive information?
In the survey by Forrester Consulting, over 50% of decision-makers had incorporated cash management technology that helped them comply with country-specific requirements. Adopting cash management solutions that make managing user rights simple was also important for 44% of the respondents.
Failure to comply with safety and other regulatory requirements in your operations can lead to expensive lawsuits. Some common security and compliance requirements are:
- Multi-factor authentication
- Fraud protection
- Data encryption
- Audit trails for each transaction
- Compliance with ISO and other industry-specific regulations
Partner with a vendor who understands the regulatory requirements in your area(s) of operation. Your solution provider’s cash management services should also be secure and compliant with the latest industry regulations.
Let Us Help You Choose Your Best Cash Management Solution
Even with a list of factors to consider, choosing the right cash management system can feel like a bumpy journey. At Deposita, we don’t just help you choose a suitable cash management solution. We also provide remote monitoring services and diagnostics to troubleshoot systems to limit service disruptions. You also get thorough training on-site to help you transition into the new technology with ease.
If you’re still wondering what cash management solution to go with, book a free consultation with us. Our experts will conduct a thorough assessment of your business and recommend a suitable cash management solution.