Constantly dealing with unnecessary costs and fees is no way of driving an efficient business. Many of these charges are up front and easily addressable. There are other not-so-evident costs, though, that can weigh down a company’s accounting ledger more than you would think. And these often take the form of bank fees, CIT fees and money-movement charges.
One of the costly side effects of a store’s cash intake is the fee that banks charge for every miscounted deposit sent through the cash-in-transit (CIT) system. Just a few dollars, or even a few cents off, and you’re saddled with a bank penalty (or in banking terms: a “deposit correction fee”) running from $5 to $20 per occurrence.
Most businesses only become aware of these events in the end-of-month statements which add up the error-laden deposit fees all into one unpleasant lump sum.
Compounding that, you must now devote valuable time and labor to reconcile the differences, determine the origin, and add additional procedural steps to stop repeat episodes.
Deposit correction fees can certainly weigh down profit margins if left unchecked. But there may be even more fees just around the corner. And these could come from the very service you entrust with moving your cash safely: the CIT company.
There is no doubt that cash in transit companies offer a vital service to retailers and restaurants, and accordingly have a standard monthly charge for their scheduled services. Vary from that schedule for any reason, however, and additional fees begin to mount:
• Missed pick-ups: Did your CIT fail to pick up the deposit because your store didn’t have it ready on time? That’s likely a fee. And suppose your CIT has an operational issue and misses or even cancels a pickup? Hopefully, there’s not a charge for that one, but you’ll want to check just in case.
• Un-scheduled or emergency pick-ups or drop-offs: Because of the flow of cash coming in and out, off-schedule and additional CIT deliveries/collections can be the biggest contributor to additional bank fees.
• A now obsolete pick-up schedule: Perhaps your CIT comes by too often – picking up smaller and smaller amounts of cash, if any at all. Each pick-up still carries a cost to you, even the ones that aren’t particularly worthy.
The clearest solution to reducing and even eliminating bank deposit correction fees and additional CIT-based charges is to enhance your cash management procedures, allowing you full-time (and real-time) visibility of your cash, as well as your ability to more accurately forecast upcoming periods of cash intake and withdrawal.
Costly errors in cash counting, either due to time or personnel constraints, are best remedied by intelligent cash counters like the T-ix where bills, coins, bags, straps, and even rolls of cash can be counted accurately and quickly. With an accurate count on the deposit slip, the correction fee is now eliminated. Plus, many hours of investigative manpower trying to nail down and rectify old errors are no longer needed.
Keeping your CIT cash pickup and drop-off schedules well-timed and optimized requires both a good estimation of upcoming in-store consumer activity and a real-time view of the cash on hand at all of the stores in your network.
The forecasting part is, by nature, a bit tricky. You have seasonal spurts and lulls as well as certain days of the week (and even certain hours of the day) where business has historically been brisk – all of which has to be taken into account. Balancing the change needed on hand while depositing the excess cash intake is obviously a schedule that only you can make.
To best assemble your own unique and realistic schedule, you will need a clear insight into upcoming cash needs and surpluses, accompanied by both real-time cash visibility and trending activity.
For the latter, a cash office retail software package, can really do the trick. With effective cash office software, you can now make well informed decisions as to anticipated change levels at critical times. This will keep your CIT pickup schedule at peak efficiency.
Kicking unnecessary fees and charges to the curb can yield big savings to any company’s bottom line. And there are several types of cash management technologies that will gain you the insight to do just that. Download our Cash Management Jungle Ebook to discover which cash management technology might be the best fit for your business.