NCR has separated into two separate and distinct companies: NCR VOYIX and NCR Atleos.
This website is temporarily being used by and for NCR VOYIX alone, and not by or for NCR Atleos. Click here to go to the NCR Atleos website.

Closing the cash cycle: Challenges with cash handling and how virtual vaults will solve them

Published July 21, 2021

The old ways of handling cash may be harming your business

In some areas of the world, cash is still king for everyday purchases at retail stores and restaurants. But with the growing popularity of more secure, contactless payment methods, cash handling processes are starting to show their age. Is it possible for technological innovation to make decades-old cash management procedures more frictionless for businesses?

Virtual vaults make cash handling more accurate, efficient and secure because they minimize the possibility of human error and ensure balances are readily available to businesses at all times. Closing the cash cycle—reducing the need for cash in transit and keeping only the optimal amount of cash on-premise—is the future of cash handling for retailers and restaurants.

Cash handling processes are risky and inefficient

The way businesses handle cash has remained largely the same for ages. But with COVID-19 accelerating alternative payment methods, cash processing is inaccurate and moves at a snail’s pace by comparison. So, cash handling has some catching up to do to remain viable for businesses in a digital-first era.

Related: Cash trends in a digital world

There’s a lot of room for error and loss

There’s ample opportunity for cash to be misplaced, miscounted or worse as it cycles through retail stores and restaurants. The cash moves from the customer’s wallet to the till, to the backroom to be counted then eventually into an armored vehicle on its way to the bank. All this movement causes many chances for discrepancy or loss—even when staff is properly trained and well-intentioned.

“In most retail businesses, cashiers use the same till. It’s easy and convenient, but it can make it more difficult to determine who’s responsible for any errors that happen to crop up. The same is true in the back office. If you’re counting and sorting cash by hand, it’s harder to keep track of who was handling your cash. This lack of accountability makes it difficult to spot other issues, such as when cashiers are skimming from their tills or other dishonest behavior.”—Andrea Lombardi, CashTech, 2020

It’s important to understand, though, that not all cash handling issues stem from dishonest employees. Making mistakes is a part of the human condition—and we’re more prone to doing so in high-stress situations. For example, restaurant servers handle a lot of paper money during peak hours and are responsible for cashing out at the end of their shifts. Any mistakes are sometimes not caught for several days, making the reconciliation of retroactive cash balances a headache. 

If the stars align and the correct amount of cash makes it into the safe at the end of the day, the risk isn’t over yet. Cash in transit heists are a very real thing—more prevalent in certain regions, but a risk everywhere nonetheless—and with a greater frequency of physical cash transfers, another pitfall in the cash handling process emerges.

It takes times for cash flow to become available to businesses

Readily available cash flow is essential—especially for small and medium-sized businesses—to keep things running smoothly. The problem with conventional cash handling methods is an inevitable delay between when the cash goes to the bank and when it becomes accessible.

Unlike credit cards and other payment methods, where everything happens electronically, and thus the turnaround of funds is quicker, cash needs to be physically transported and accounted for. This presents a major dilemma for businesses. We know that cash is still necessary and that “getting paid and putting cash back into the company is priority one,” so businesses need a way to apply the efficiency of electronic fund transfers to their cash cycles.

Virtual vaulting brings cash handling into the modern era

Bringing cash handling into the digital era means leveraging smart technology to uplift age-old methods. Safes have been the tried-and-true way to store cash and valuables for centuries, and while the concept of virtually vaulting doesn’t aim to reinvent the wheel, it does aim to improve upon it. 

The concept—equipping safes with digital technology—is designed to bestow cash with the same efficiencies as any electronic payment method. It increases accuracy, reduces the need for cash in transit and, most importantly, makes cash balances available to businesses immediately.

Related: Transforming money movement in the bank branch

Pinpoint accuracy reduces loss and improves reconciliation

When cash is inserted into a smart safe, it counts and reconciles the deposit immediately. This counteracts potential losses in the cash handling cycle in a number of ways:

  • Cash is electronically counted as it’s deposited into the safe, either verifying physical counts done by an employee or introducing the need for a person to count it at all.
  • If there is a disparity between what’s on paper and cash on hand, it’s caught immediately, easing reconciliation on the spot.
  • Virtual vaults keep only the optimal amount of cash on-premise at any given time, reducing the frequency of cash in transit pickups, therefore minimizing external risks to cash assets.

These benefits free up staff so they can spend more time on important parts of the business. There’s also increased cash handling visibility, letting businesses identify problem areas to fix them quickly.

Cash balances are accessible to the business instantly

Virtual vaults transmit the precise balance to the relevant bank and deposit it into the business account daily. This instant access means no waiting for physical cash to make its way to the bank before it can be used to bolster the business. 

Depending on the company’s needs, cash holdings can begin to accrue interest immediately or be used to develop other business areas. Having consistent cash availability also reduces the need for businesses to take on debt for improvements and inventory. These optimizations, which previously only applied to banks themselves, effectively allow retail and restaurant businesses to function as their own financial institutions—promptly recycling cash back into the business.

Less worrying about cash means more time spent satisfying customers

Outdated cash handling processes become busywork that takes time away from more important parts of a business—especially in retail and restaurants. Of course, you want your business to grow, so elevating the customer experience needs to be the focus. And in a world where digital transformation is the norm, antiquated cash cycles are counterproductive.

Need more information?