How to Plan Ahead for Your Cash Needs – Keeping Cash on the Premises and Replenishment
Most retail stores, restaurants, theaters and small storefront services such as dry cleaners and hair salons need cash—currency in bills and coins—to transact business. After all, large numbers of customers use cash instead of credit or debit cards and always will. Given that fact, the need for cash invites several questions.
Most retail stores, restaurants, theaters and small storefront services such as dry cleaners and hair salons need cash—currency in bills and coins—to transact business. After all, large numbers of customers use cash instead of credit or debit cards and always will. Given that fact, the need for cash invites several questions, such as:
• How much is enough to keep on premise?
• How much do you keep in your register drawer or drawers? How much do you keep in your safe?
• How often do you need to replenish your on-premise denominations?
• How often do you make a cash drop?
• And, how do you plan ahead for spikes in sales volumes due to time-of-day, day-of-week or time-of-year conditions?
If you’re a long-established business, you’ve probably learned the answers to these questions by trial-and-error, but if you’re relatively new to your business or planning to open one, please read on. You especially don’t want to be caught short on cash when your bank’s closed—usually on weekends, of course, when you might well be busiest. On the other hand, you don’t want cash sitting idle. I’ll start by discussing the first three bullet points listed above.
How much cash do you keep on premise—in your drawer and, as backup, in your safe? For most small businesses, a $300 cash drawer is enough to make change in the course of 10 to 12 hours of operation. Here’s how that can break down in denominations:
• Ones: $50
• Fives: $50
• Tens: $70
• Twenties: $100
• Quarters: $20
• Dimes: $5
• Nickels: $4
• Pennies: $1
Replenishing these denominations from your safe depends on your volume of cash transactions and how large the bills are that your customers use to pay. The higher your volumes and larger the bills used, the more cash in these denominations you’ll want to have on hand in your safe. Usually keeping three to five times that amount ($900 to $1,500) in your safe will suffice. How much you keep in your safe also depends on your security against robbery and whether your cashiers have keys to the safe or not.
How often do you replenish your on-premise denominations? At the risk of sounding flip, as often as you need to. Running out of needed denominations can cause all sorts of disruptions and customer satisfaction issues. At the same time, running to the bank (or, in desperation, to a neighboring business) can be a huge productivity drain. Garda Cash Logistics’ EvenXchange services can bring the change you need when you need it.
A quick call to Garda’s toll-free number will begin the set up process, so we can deliver the denominations you need the next day, or set up a standing order to have your changed delivered on the same day each week. A Garda cash delivery messenger and armored truck will bring the change you need to your door with the amounts you’ve previously specified. Just seal the amount you’re exchanging in a bag and sign your name. Since you’re exchanging an equal amount of currency for an equal amount of change, your change fund is always in balance. And it’s never mixed with your deposits.
Now that you’ve started to explore the topic, you won’t want to miss next week’s post where I’ll move on to our remaining bullet points, covering how often you should make a cash drop and how to plan for spikes in business volumes.
For more information on Garda’s cash management services, visit our website or stay tuned for more info later this week!