Future of Retail — The CFO Issue

issue 04

and CFOs usually don’t have the luxury of real- time visibility across their operations.

CASH IS HERE TO STAY Research shows cash accounts for roughly 48% of all payment transactions in the UK and it is used as often as the second most popular payment method, debit cards (PYMTS Global Cash Index Report 2016). But the average value of cash transactions is lower than most other payment methods. Small businesses even prefer cash transactions, accepting no payments in plastic or they set minimum spend, so they don’t have to pay credit card fees. Handling cash costs money too. Not only

do businesses have to pay for time spent on counting, processing and transporting cash, but they also lose substantial sums in discrepancies. Cash costs up to 1.5% of a country’s GDP. While most of that is due to theft, the figure also includes time spent on processing, counting and transporting notes and coins. Theft is one of the retail world’s biggest

challenges. During 2014–2015, retail stores in the UK reported a shrinkage rate of 0.89% amounting to over £4.2 million. This hurts businesses and their customers because merchants often have to pass on these losses by raising prices. Nearly 25% of small businesses in the UK surveyed by Sage, said they had been a victim of cash theft by a member of their own staff. With cash management solutions, businesses can fight back against theft and achieve an advantage over competitors.

CASH BURNING AN OPERATIONAL HOLE IN YOUR POCKET Cash is not going away anytime soon and every retail outlet faces the cash handling challenge, an area where the associated costs remain a constant burden. It is often hard to define the scale due to hidden operational costs and poor cash handling data. Cashiers, store managers and back office staff must deal with cash day in, day out when the labour rate is escalating and the labour pool is tight. The time spent on physically moving the

cash between the front and the back office, counting the cash between shifts for security checks or for reconciliation and the general management of the float, is significant but hard to quantify. Cashiers spend an average of two minutes per transaction counting and sorting cash. It takes seven minutes on average to count out a drawer before and after shifts. The time spent counting cash at the PoS can create bottlenecks that could affect customer service and your bottom-line. In the age of Amazon, competition is stronger than ever, retailers are looking to find more hours at store level to focus on customer service to build loyalty and deliver growth.

ENDING THE LP HEADACHE It is unsurprising, but when cash is involved in a retail environment, the business is prone to errors or cash loss which eats up more time and money. The pressures of counting to match the speed and volume of shoppers during peak hours can lead to unintentional cash loss. In the rush to serve customers and move on to the next transaction, honest mistakes happen — a cashier gives a customer the wrong change or a restaurant staff member miscounts notes from a customer, leaving the till short. Whether cashiers are handling high value notes or small change when serving customers at the PoS, or preparing cash for the back office, cash losses are inevitable. Problems involving a specific individual may

elude detection or, in cases of dishonesty, be tough to prove. This is especially difficult at sites where multiple employees share cash drawers. Intelligent cash drawer software keeps a record of all activity at each drawer, so it’s easy to spot a recurring problem with an individual or identify where more training is needed. Managers can use data captured to address areas needing improvement. Intelligent cash drawer solutions provide cashier accountability for lane accountability models and an improved audit trail between the front of house and back office. When an employee is stealing, retailers

tend to cut their losses if it is a small amount and even budget for it. Even when bigger

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