Businesses often find themselves in trying times when dealing with cash deposits. More than 220 million people still rely on cash and cash-based payments. Although about 90% of businesses in emerging markets still operate in cash, banking procedures are yet to be made cash-friendly for deposits at scale. This blog discusses the challenges of cash deposit and what you can do to solve them.
Cash deposits pose great challenges for businesses and SMEs that are directly reflected on their teams.
Once the bulk cash enters the vicinity, millions of denominations must be counted, recounted and accounted for within manual ledgers handled by the cash manager. This may lead to unavoidable time delays to complete cash deposits and is prone to errors.
Dealing with cash often means cash collections happening within the vicinity such as inside warehouses, darkstores or offices, which then need to be safely stored overnight – ready for deposits the next day. This often leads to high insurance premiums that take into account the safety and risk of cash at scale.
Often, if the cash collection within the locality exceeds a certain limit entailed by the insurance policy, this cash needs to be either stored in another location, or needs to be moved instantly. This puts businesses and operations team in a constant state of struggle to safely store and keep regular checks on cash present within the vicinity.
Cash logistics are almost always organised by the business themselves, which includes arranging safe storage spaces, coordinating cash in transit services to move bulks of cash from the point of aggregation finally to the bank for deposits, travelling with cash in transit service providers to ensure reliability in services and so on. Managing the entire lifecycle of cash and coordinating with personnel at multiple touchpoints, creates silos in the entire process. Moreover, for businesses dealing with small denominations, it’s an even greater challenge for them to get denominations accepted at the cash deposit counter. These operations are often labour intensive and equally time-consuming. However, these processes cannot be detoured with traditional cash management systems.
Once the cash arrives at the bank, the cash must then be sorted and counted once again. Any differences arising at the cash counter must then be accounted for – further creating time delays.
For businesses, every second is an opportunity. Cycle times for the point of cash collection to actual settlement within the bank take 2 to 3 business days on average. On top of that, the cash deposit process alone occupies at least two-thirds of the day. This stalls businesses from accessing their cash for use. This may include making timely payments to stay ahead of credit terms, or potential reinvesting opportunities to grow their business
Storage of cash within warehouses and transportation of cash from the warehouse to the cash deposit counters located at the bank calls for excessive risk.
Cash deposits need not be so difficult to manage for businesses. B2B eCommerce players such as Jugnu and the leaders of Coca-Cola distribution Unified distributors have been relying on modern cash management solutions. With Cash Deposit Machines (also called Loop Machines) installed in-house within their warehouses safety and logistics is never a point of concern. Moreover, these businesses have outsourced the entire Cash Collection process from the point of aggregation. This means that cash transportation, cash deposit and the risk that comes with is non-existent. Cash Deposits, that previously occupied days of access to finances and deposit procedures, are now processed instantly.
Moreover, businesses such as these have been leveraging on CashWise, the cash analytics platform, that gives a deeper insight into the cash flux and allows management, cash pickups and financing from a single click of a button.
With Loop, your business receives tailor-made cash-first financial solutions. The digital and financial infrastructure allows you to streamline disbursements, automate and digitise cash in real time for any scale. If you find yourself searching for “Banks near me” or “Cash Deposit Machines near me”, Loop is the one that brings your bank to your business. Never leave your doorstep.