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Top down view on single cash register drawer stocked full with pennies, dimes, nickels, quarters, various American dollar bills over wooden table
Cash Management is the process of efficient collection, concentration, disbursement, and investment of cash in any business establishment while assessing and maintaining the company’s liquidity. Business managers and cash handlers are responsible for maintaining an order in cash schedules (inflows and outflows) in order to remain solvent and keep things running smoothly. In other words, it is the way in which a business keeps a record and manages its financial operations, such as investments in different short/long projects, a collection of receivables/revenues, payment schedules (expenses, debts, and liabilities).  It also ensures that the business has sufficient cash to keep the business afloat financially.

Why do Business Start-ups Fail to Create a Long-Term Impact?

Without a doubt, effective cash management is critically important for new and growing businesses. Entrepreneurial business ventures across the globe face extreme level difficulties in managing their cash flow effectively. According to research, 83% of the total start-ups fail to create a significant impact in the market as they lack financial management skills, knowledge, expertise and experience that are necessary to keep the business afloat in its ideal capacity. This reflects that maintaining a healthy cash flow bears a paramount importance in the retail industry as it keeps the business going—on and on!

No matter how great your business model may be, how effective your business execution strategy may be, how many investors are ready to support your business’s strategic mission—you can’t survive for long if you are not capable of managing your company’s cash flow. Another reason why small-scale retailers and business entrepreneurs fail to create an impact in tough circumstances is that they fail to understand the relationship between ‘managing cash flow’ and ‘cash management knowledge.’ The businesses that are able to understand and fill the gap earn huge rewards in terms of increased profitability and sustainability, which are the essential components of any successful business.

Cash Keeps The Business Afloat Financially

‘Cash is king’—we have been hearing this during our entire academic journey. However, have you ever given intense thought as to why effective management of cash is considered the backbone of any business? No matter what one may argue, sound cash management is the real game changer for any business, which means it either makes the game or breaks the business into pieces.  In other words, without money, businesses will probably hit a dead end, which means they cannot survive. Money acts as a front-line guard that protects a business from impending financial threats or unforeseen business crises.

For effective cash management, businesses need to address three main questions 1) how much cash do they have 2) where is the cash coming from (influx of cash) and 3) where is our cash going (outflow of cash). The businesses that maintain and keep the right strategic balance in addressing all of these questions can expect to keep their business afloat financially, which means higher monetary gains in the future. We have long been told that profits determine the fate of any business and keep it going.

A Biased Perspective

A recent study has revealed that most businesses, especially start-ups, fail due to the absence of cash rather than the absence of profits. This indicates that effective cash flow management is significantly important for deciding the fate of the business – long-term sustainability and profitability. Besides giving financial control, it assists businesses to fight with impending financial dangers and helps them to plan for unforeseen eventualities.

What Can You Do To Maintain A Healthy Flow Of Cash?

Make a Budget

For knowing the exact status of the influx and outflow of cash, you need to make a financial budget. Cash management is not an alien job. It will require your time, efforts, and energy. Once you know how to control and handle your daily cash, then you can put your retail business on the right track.

Collect Receivables Promptly

It is important for any business to collect their receivables as soon as the sales are made. For maintaining a healthy financial life cycle, transactions must be reviewed, tracked periodically, and credited to your business account without further delays. The quicker you do it, the quicker you will become financially secure.

Manage Inventory Carefully

A smooth flow of business activities can be ensured if you manage your inventory carefully. Obviously, you must have a clear picture of your suppliers and vendor details for an effective payment and cash management schedule. According to studies, nearly 75% of your cash is tied up in inventory which indicates that you need to make careful judgments and analysis about how to stock your shelves.

Launch Loyalty Programs for Employees

Your employees are your real assets and investing in them seems to be a fair trade. Obviously, business managers will most likely be the one handling and managing cash, so you need to empower and reward all of your employees at their respective grades in order to motivate them to not to get involved in unethical activities.

Use Technology to Minimize Errors

Sometimes, managers or cash handlers will face extreme levels of difficulty in managing cash during rush hours. In order to avoid discrepancies, it is better to use technology, integrate POS software, or encourage customers to make wired payments. This will significantly help managers to manage cash easily and more efficiently.

Define Your Cash Handling Processes

Cash management may seem daunting at first but if you define a set process for managing your daily cash operations, it will be a big plus for your business. Some retail houses may use manual ways of handling daily management, paper trails, and tracking. The rest may use more advanced and electronic cash handling platforms, systems or software. In short, it is all about how well you can manage your cash.

Conclusion

Retailers across the globe have different levels of expertise, knowledge, and experience in handling their cash and disbursement schedule. For achieving success and a healthy financial life cycle, you need to learn the art of handling cash properly. Cash management may seem extremely challenging at first but the right cash order can be maintained once you develop those skills. You can also hire experienced and educated business managers and accountants for executing important cash-related tasks.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

POS Checklist - Complete Controller

The job of a retailer is to put all its focus, time, and resources into trying to find ways to generate more sales. Sales ultimately lead to revenues, which are integral to the growth of the business. However, the actual process of sales involves many critical steps, physical processes, and systems that allow a transaction to occur. A Point of Sale (POS) system that is precisely right for your business will help you in that regard. A POS checklist would not only include conducting sales transactions. It should also handle several other activities around it, ranging from inventory management, returns, and exchanges to tracking customer behavior.

With so many solutions offered for POS services, it can be challenging to find the right one for your retail business. In this article, we have highlighted guidelines that can help you choose what’s best for you. Check out America's Best Bookkeepers

POS Checklist – Understanding your Needs

Due to many POS systems available in the market, it cannot be obvious to choose among them before assessing your business needs. If you leave this task to the system provider, they will most likely install a system that offers them the most profit and is not suited to your needs. Before pursuing a specific system provider, you must assess your needs according to the below-mentioned specifications.

Inventory and Customer Management

For any business that sells products, inventory management should be a priority on the POS checklist. Keeping your shelves stocked requires you to keep an efficient POS system that automatically updates after a sale has been made. This will save you a lot of time and energy in keeping track of every item in the inventory. Check out America's Best Bookkeepers

Apart from managing your inventory, a POS system also allows you to keep a close eye on your customers. The right POS system for your business lets you run loyalty programs that are great for your business’ marketing aspect. Customers can avail discounts and get alerts about sales or discount offers in advance. It also allows insights into customer behavior by recording each customer separately.

Hardware Needs

A POS system itself is software, but it is essential to run it on the correct hardware. Typically, small businesses will only require a tablet or system that supports cloud-based POS software. However, larger stores need printers, terminals, card readers, e-tags, and other sophisticated machinery to make the checkout process faster and convenient.

Before making any hardware investments, scrutinize what you have at hand and what must be added to make the process more efficient.

A POS Checklist must entail the effectiveness of a POS system in terms of its capability and robustness. As every business has specific unique needs, your business is no exception. Therefore, the POS system must cater to the individual demands of your business. Check out America's Best Bookkeepers

Ease of Use

This is perhaps the most critical capability associated with a POS system. Processing time is of the utmost importance when there are long queues of customers, and every second is crucial. The POS system should be simple enough so that you don’t have to consult a manual every time there is a pause. A POS checklist must ensure that the system is thoroughly checked and beta-tested before implementation.

Integrating other Areas of your Business

If a POS system is unable to integrate the key areas of supply chain and logistics with your inventory, it might not be robust and effective. Systems that automate the most process are generally a safe bet because they save you from spending countless hours transferring data from one function to another.

Another point to remember when choosing the right system is that the POS checklist should ensure the vendor clearly illustrates the price for the implementation of the whole system. If the system can track information related to business analytics, it is a huge benefit, and you can only observe its real advantages once you implement one in your business.

 

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers