Protecting Your Cash Cow

Cash has its advantages, but it can put you at risk too. Know where your weaknesses lie and take control of your safety.

Protecting Your Cash Cow

We’ve heard the saying ‘cash is king’, but we also know that where there’s a king, there are sticky fingers trying to get the golden crown. Richard Phillips, founder and MD of Cash Connect Management Solutions, talks us through managing cash-based businesses.

What industries are typically cash based?

According to the ATM International Association, 84% of all payments worldwide are conducted with cash. In South Africa cash remains the most predominant form of payment throughout the fast-moving consumer goods sector as much as in many other retail, wholesale, manufacturing and agri-industrial environments.

From fast food outlets, fuel retailers, all the way to huge super wholesalers, cash is the most frequently used medium of payment.

What are the advantages of cash?

The use of cash is influenced primarily by consumer demand, and its popularity arises from the fact that it’s anonymous, it’s accepted without question when presented, it provides immediate settlement and does not require promises to be fulfilled or processes to be followed.

Basically, it’s the easiest payment medium. So much so that often cash will attract a discount. It’s the easiest instrument to count, reconcile and account for and it’s guaranteed by the state.

On the flip side, what are the operational risks of cash?

For the same reason that cash has positive attributes, it’s also the most popular target of criminal attack. The very same businesses that receive cash are thus increasingly vulnerable to armed robbery. Armed robberies against business in 2012 averaged over 40 a day.

No one seems to escape being singled out, but evidence suggests that the weaker the cash defences the greater the incidence of attack.

What are the most common mistakes businesses make with cash?

The most common mistake is to believe “it will never happen to me!” It’s common knowledge amongst security professionals that cash is the primary reason for armed robbery; that 90% of attacks happen with some form of insider information or participation; that your cash management processes and practices are common knowledge within your organisation (even if you think they’re not!); and armed robbers are generally not intimidated by the justice system.

What precautions can a business take to enhance their safety?

The solution to managing cash in today’s retail world is unquestionably making use of an Automated Deposit Machine (ADM) linked to a fully integrated cash management service.

The key to determining the effectiveness and reliability of this service lies in understanding what to look for, such as:

  • The ADM itself must be a hardened safe (preferably SABS certified Cat 4)
  • The system should use tamper evident bags that conform with minimum standards for cash transportation within the cash in transit (CIT) industry
  • The risk for the cash should transfer, under the supply agreement, to the supplier from the moment it’s deposited into the ADM
  • The service must include the provision of an armoured car service by a recognised and reputable CIT company.
Tracy Lee Nicol
About the Author
Tracy-Lee Nicol is the managing editor of Franchise Zone Magazine and deputy editor of Entrepreneur Magazine. She studied her Masters degree in Art History and Visual Culture at Rhodes University and spent the next two years working and travelling in Asia. Her love of people, business and teaching is reflected in telling the stories of entrepreneurs, franchisees and franchisors, inspiring others to take the leap to being their own boss and bringing about positive change in South Africa.

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