8 Tips For Better Cash Management In Your Retail Store 


By Sally Wu

Whether you’re opening a clothing store, a cafe, restaurant chain or simply a weekend food outlet, cash will be critical to your business.

Optimizing cash handling is one of the most critical ingredients for achieving your company’s objectives and growth ambitions, yet often it can be lost or stolen in the course of your day-to-day running of the business.

On top of this, cash management and its connection to the running of your business is often seen as being a straightforward matter of counting the daily amount of money being generated, but this only does so much to understand your cash performance in a wider context.

While counting the daily amount of cash is a vital but simple activity, the need to keep track of how much money is generated and spent is far from straightforward. In fact, there are a number of things you can do to make your cash management easier, and see an improvement in your cash flow and overall cash management.

Here are 10 top tips for making your cash management and day-to-day operations more effective:

1. Plan ahead by observing your daily sales

One of the first steps to improving your cash management is to plan ahead and make sure you have a good understanding of how you want to run your daily business. Too much cash in the till is a dangerous sign.

Make sure you know what the key objectives are, so you can ensure you’re on track to achieve them.

When planning your business’ cash management, make sure you always think about the key areas that are going to drive the growth and development of your business, as well as the financial metrics you can expect to measure the success of your businesses to ensure it’s achieving the best results for its owners and its stakeholders.

2. Understand your accounts receivable and accounts payable

Cash in your business is only as good as the accounts receivable and accounts payable you hold. When managing cash, it’s important to look at your accounts receivable and accounts payable accounts to understand the level of payment that’s being received and what payments are being made by your customers, as well as the level of outstanding payments that need to be made to collect and/or pay your receivables.

Image by Gerd Altmann from Pixabay

You’ll need to work out how long your sales will take to collect, and how much you will need to pay back to your customers in cash over a set period of time to ensure that your accounts receivable stay on track.

Using the Statement of Revenue and Expenditure (SRE) data, it’s possible to see the value your customers are placing on their products and services, as well as the size of their invoices.

It’s also possible to see how much money your business will need to make to repay your customers, while also looking at how much you can afford to pay back to your customers.

While many customers prefer wire transfers some might give you a discount for cash deposits.

3. Improve tracking and visibility of cash movement

Transactions can often move across your account in a high volume. Having good visibility of cash movement is essential for tracking cash flow and overall business performance.

In many cases, the easiest way to improve your cash flow is to ensure you have a good supply chain in place and you’re collecting payment on time.

To keep track of cash movement, consider using a software that provides the flexibility to receive and store receipts securely. It’s also important to ensure that your customer payments are sorted and received on time.

4. Regularly check the quantity of credit and deposit notes 

While you will want to ensure the quality of the credit and deposit notes that are being carried on your balance sheet, you’ll also need to ensure that they’re not containing bank balances that have been removed in order to take money out of your business and invest in other areas of your business.

5. Consider outsourcing some day-to-day cash management activities

Outsourcing cash management tasks to professionals who are expert in this field, will allow you to focus on the activities that are relevant to your business and ensure they’re done well, resulting in more effective cash management and a better return on your investment.

6. Install a safe deposit box for cash in store

One of the most important areas of your cash management, is to make sure you never take cash management for granted.

Install a safe deposit box in your retail store and deposit all the extra cash you generate and keep the minimum that you need to keep the tills running on a daily basis.

Ensure that you have a plan in place in advance that includes the cash management tasks that need to be performed, in order to ensure you’re on top of your cash position and capital requirements.

Train your staff in till management and depositing cash safely in the vaults.

7. Have a weekly cash flow forecast for your business

Having a cash flow forecast for your business means you can accurately predict the level of cash you will need to cover your cash obligations, as well as your cash requirements to cover any outgoings.

In the event that you’re running short of cash and your current cash position doesn’t cover your short-term obligations, you can always withdraw cash from the safe vault by a trusted staff/person.

8. Focus on e-money & hire a professional to build a process

Try minimise cash handling and focus on Visa/Mastercard/ American Express and card/PoS payments to reduce your cash management efforts.

Counting too much cash also wastes a lot of employee time – a thing that can be easily done by cash registers and online computers.

Thus try to focus on sales and optimise cash handling in order to build a large business.

Check whether your systems and controls and processes allow you to manage your cash effectively, if not hire a professional to build a system for you.

(The author is a business content writer at Startupanz.com)