Retail Operations Cash Management

Study Notes

Cash Management involves the collection, disbursement, and management of cash to maintain a firm's liquidity at a minimum cost, while ensuring control and liquidity.

The main objectives include managing cash balances, margins, and timing of activities to achieve liquidity, reduce losses, and increase accuracy.

Cash Management helps reduce losses and increases accuracy in cash handling, eliminates errors and discrepancies, and enables managers to focus on customer service.

Cash handling in retail involves receiving and giving money, from the point of sale to behind-the-scenes money management during the day.
A 10-step process can be followed to improve cash handling:
- Organization is key to effective cash handling.
- Keep an eye on your cash.
- Enforce policies and procedures.
- Keep less cash on site.
- Engage your staff.
- Maintain a schedule.
- Have enough staff.
- Ask for help.
- Invest in technology.
- Keep improving.

A cash management system is an automated solution that helps manage cash handling from end to end, streamlining the process and providing benefits for the business.

A cash register is an electronic device used to calculate financial transactions, while a POS system is a computerized system that handles financial transactions, tracks inventory, and records business data.

Types of payments include:
- Cash (counting, note authenticity, safe storage, and cash receipt).
- Credit and debit cards (chip and pin machines, and card readers).
- Payment via apps.
- Gift vouchers (checking amount and authenticity, safe storage, cannot be exchanged for cash, and expiry date checks).

Receipts should contain all transaction information, including date, time, products/services, amount paid, payment method, and receipt identifier number.
Authorized staff should handle larger lodgments and withdrawals, and all staff should be trained in cash handling procedures.
Security measures include keeping cash and floats in tills or locked cash boxes, regularly removing high-value notes, and not allowing large sums to accumulate in the till.

Petty cash should be used only for small expenses, and not cash from the till, to ensure accurate till receipts.
One person should be responsible for handling petty cash, and large amounts should not be kept on premises.

Retailers can offer merchandise reservation to enhance customer service.
Reservation details should be recorded, and policies on holding reservations and deposits should be stated clearly.

A returned item can be exchanged for another item or refunded, and a store credit may be issued.
A clear refund policy should be stated, including the timeframe for returns and the process for exchanging or refunding items.

A retail location is a space leased for selling goods to consumers, with the primary goal of selling merchandise.
Key considerations for a retail location include sales floor space, adequate parking, and an overall image that attracts customers.

Frequented spots, such as mall spaces, can provide high foot traffic.
Other options include commercial buildings, office spaces, and small office/home offices.

Demographic factors, such as population density, age, and income, influence retail location decisions.
Economic factors, including local employment rates and consumer spending habits, also play a role.
Subculture, demand, market potential, sales potential, index of retail saturation, and infrastructure are additional micro factors to consider.

Physical characteristics of a site, including area, shape, soil and ground conditions, typography, and access to the site, are important considerations.

Commercial leases are typically negotiated on a per-square-meter basis.
The annual cost of the lease is determined by multiplying the square meter of the premises by the asking price per square meter (psm).
To negotiate an effective commercial lease, it's essential to:
- Evaluate your business needs
- Involve a lawyer
- Understand your costs
- Understand your lease options
- Check market rents
- Research the property
- Seek tenant inducements