Your cash management processes can play a big part in the operational performance and resilience of your business.
A recent study by EY-Parthenon found that of 5,000 of the top largest public companies tracked globally, those with better cash management were 19% more resilient than their low-performing peers while 21% were better at limiting initial shocks caused by market downturns.
From a Operations Director’s perspective, there are some critical points for managing cash performance and profitability. Let’s look at each of these points in terms of their impact on cost management, cash flow and overall profitability.
Cost Evaluation: Thoroughly assess operational costs
Analysing costs is the basis of effective cost management. By scrutinising all operational expenses, you can identify areas where costs can be trimmed or eliminated.
It’s vital to regularly review any expenses linked with cash handling processes, including human resources, security, and transportation costs. Identify where those costs can be reduced, such as optimising cash pick-up schedules to minimise transportation expenses.
Cost Reduction Goals: Set clear objectives for cost reduction
Setting specific, measurable cost reduction targets provides a clear direction for your business. It helps in tracking progress and ensures all your internal teams are aligned with the goal of improving profitability.
For example, set a specific target to reduce cash handling cost by 10% over the next quarter. This goal could include reducing overtime for cashiers and implementing more efficient cash counting methods. Setting goals always helps communicate priorities across the business and gets things done.
Efficiency Optimisation: Streamline processes for resource efficiency
Optimising operational processes not only reduces costs but also enhances productivity and resource utilisation.
A unified solution incorporating front-end and back office hardware solutions, like integrated cash recyclers and smart safes, and cash management software is recommended.
This can then be seamlessly integrated with other systems in the company or organisation to create a real time view of cash in line with other operational systems. This further will drive efficiency gains and profitability.
Cloud-based solutions also offer enhanced security. With strong encryption, multi-factor authentication, and continuous monitoring, sensitive financial data is kept safe from unauthorised access and the opportunity for breaches are reduced.
This elevated level of security helps organisations to maintain trust with your customers and partners, ensuring financial data is well protected.