Direct Deposit by yaoyufang

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									                    Banking ties, technology help cut float,
                         prep time for cash deposits
                                                        By Angel Abcede
                                                       aabcede@cspnet.com




W
         hile credit-card fees prompt         Fred Purches, senior vice president of       gins get squeezed.
         retailer cries of woe, the other     strategic solutions and project man-            Still, Purches says workplace safety
         end of the game—cash man-            agement for Brink’s Inc., Dallas.“It’s as    and cash-management efficiencies often
agement—remains an unsung burden              if you moved the bank to the store.”         transcend cost, even for smaller com-
of reconciliation, prep time for                  Of course, cutting the time needed       panies. “We have customers across the
deposits and the dreaded exposed walk         to reconcile shift drawers and physi-        spectrum,” Purches says, citing how
to the nearby bank.                           cally make deposits, as well as the          some Brink’s customers own one store
   Developing technologies and grow-          potential reduction of float time, are       and others have thousands.“The notion
ing ties between cash-management              benefits any retailer would want. The        of using an armored-car service ends
providers and banks appear to be ush-         concern becomes cost because, at least       up being a philosophical decision for
ering in the day of automated deposits,       for Brink’s, what the company calls          … store [management]. Something will
in which putting cash into the store safe’s   “same-day credit” for cash is bundled        happen; maybe someone gets robbed.
bill acceptor replaces that back-office       into the larger package that includes        There’s a financial exposure, cost and a
counting and that risky trip to the bank.     armored-car service.                         psychological component.”
   “We’ve partnered up with banks so              Cost can be an even greater issue
that [retailers] can get credit for money     for smaller chains or single-store own-      Fast Food, Fast Money
in the safe, whether or not that money        ers, who need to watch operational           C-stores hold more than 50% of the
has been brought to the bank yet,” says       costs, especially when gasoline mar-         6,000 safes currently installed with
                                                                                           some portion of Brink’s bundled offer.
                                  MONEY MAN: The armored-car service has evolved           Same-day credit has been an option for
                                   into a cash-management solution for many retailers.     about a year. While Purches could not
                                                                                           say how many c-store retailers have
                                                                                           moved to the same-day-credit func-
                                                                                           tionality, he says customers have defi-
                                                                                           nitely started to add the service and
                                                                                           others are considering it. One large
                                                                                           chain that has publicly announced its
                                                                                           use of the service is quick-serve ham-
                                                                                           burger chain Wendy’s, Dublin, Ohio.
                                                                                              For Wendy’s, the service is not quite
                                                                                           “same day,” with store safes getting
                                                                                           polled at 3 a.m. and then the availabil-
                                                                                           ity of funds coming hours later with
                                                                                           the next business day. Brink’s officials
                                                                                           say it’s an optional setup. Banks typi-
                                                                                           cally close out the day at 6 p.m., so for
                                                                                           retailers who prefer a faster turnaround,


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    Calculating ROI
    B  esides the key benefits of reducing float and increasing safety, retailers hoping to
       thoroughly investigate the options of armored-car service and same-day credit for
    cash deposited in store safes can evaluate savings on the cash-management end.               and prepares the pile for deposit.
        Ed McGunn, CEO of Corporate Safe Specialists, Posen, Ill., says playing with the            “Sometimes there are discrepancies
    numbers can give retailers a picture of how such an expense—which could range from           and then arguments between the clerk
    $500 to $600 per month per store—could balance out in the end. The subtotal is calculated    and the manager, even if it’s just $20 is
    by taking into account the counting, preparing and delivering of cash deposits with a        missing,” Purches of Brink’s says. “It’s
    supervisor at $11 per hour and a manager at $9 per hour.                                     not a clean process.”
        Balancing cash in the till:                       1.75 hours                                The entire cycle takes a manager
        Preparing bank deposit:                          +0.75 hours                             anywhere from two to four hours a day
        Delivering deposit to bank:                      +0.75 hours                             and ends with the manager walking or
        Subtotal:                                         $65                                    driving the deposit to the bank.
        Average cash loss per day per store:             +$5                                        Over the years, safe manufacturers
        Total average traditional cash-management         $70                                    (which over a decade ago included
        cost per store per day:                                                                  Brink’s) have developed computerized
        Monthly tabulation:                             1
                                      $70 x 30 days = $2, 00                                     product lines that improved in terms
                                                                                                 of software year after year. Hardware
                                                                                                 also has evolved, with options includ-
a 5 p.m. poll could clear funds in the            related activities, which included count-      ing safes that accepted stacks of cash or
safe that very day. In any case, estimates        ing the till up to three times a day.He says   ones that had two bill acceptors built
are the service will save the fast-food           managers who were better skilled at get-       into them, Purches says.
chain $3 million annually.                        ting freshly made meals to customers              The drive to automate safes sprang
   Chris Manning, director of loss pre-           cited counting and reconciling cash one        from a desire among retailers to man-
vention and security for Wendy’s, says            of the most difficult parts of their jobs.     age their equipment remotely, says Ed
that on average, store employees previ-               For Manning, the chain tested and          McGunn, CEO of Corporate Safe Spe-
ously spent 27 hours a week doing cash-           implemented the service for myriad             cialists (CSS), Posen, Ill. Brink’s uses
                                                  reasons,“but mainly to save on fees and        CSS hardware as part of its solution.
                                                  costs associated with banking,” he says.       “For us, it started with customers want-
                                                  “Life safety and loss reduction were also      ing to change the alarm codes
                                                       instrumental in our ROI model.”           remotely,” McGunn says.“But once you
                                                                                                 put a computer into the safe, you could
                                                             Getting There                       do things like tabulate deposits.”
                                                             For the c-store industry,              Bill validation advanced as bill read-
                                                                which runs the gamut in          ers became more functional and
                                                               terms of electronic sophisti-     robust. “Instead of manual deposits,
                                                              cation, the traditional cash-      with a bill validation [device], you
                                                  management process starts with a shift         could see every single note go—in real
                                                  cashier clipping bills together and drop-      time—into the safe,” McGunn says, cit-
                                                  ping them into a safe near the register.       ing how the advancements really began
                                                  At the end of the day, a manager or            around the year 2000. “So now, all of
                                                  supervisor opens the safe, takes the           a sudden, store owners had this power.”
                                                  accumulated cash into the back office
                                                                                                 Banking Ties
                                                                                                 Still, while technology advancements
                                                SAFE EVOLUTION: Computerized systems
                                                have made today’s safes capable of remote        began to open the door to things such
                                               applications, including same-day credit for       as same-day credit for cash deposits, a
                                               cash deposits made at store safes.                vital piece was missing. For Brink’s, that

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                                                     Today, many banks allow Brink’s to                    Consolidates banking relation-
                                                  provide this service to retailers.“The bank      ships. Retailers no longer have to pick
                                                  needs to agree to do this as well,” Purches      a bank based on how close a branch is
                                                  says.“It’s the bank’s willingness to say,‘I’ll   to a store.
                                                  give you the credit at the store [level].’ ”             Saves store-manager time.
                                                     Though Brink’s cannot force a bank            Counting cash at the store becomes a
                                                  to participate, retailers can request that       thing of the past.
                                                  banks consider allowing the service or,                  Limits risk of internal theft. The
                                                  in a more extreme case, the retailer can         service reduces the amount of cash
SHIFTING RESPONSIBILITIES: For
everyone from single-store operators to
                                                  change banks. The second alternative             accessible to employees.
multistore retailers, corporate philosophy        sometimes is a valid choice because                      Limits exposure and the time
dictates the use of armored-car services.         one of the benefits of the same-day              needed to go to the bank. The risk of
                                                  credit service is the ability to consoli-        walking or even driving to a nearby
critical link was a strong relationship           date bank accounts.                              bank is eliminated.
with banks. It’s something that began                “If you think about it, in the old way           As technology and trust between
to open up when financial institutions            [retailers] were picking banks based on          processors and banks develops, retail-
in larger and larger numbers began                proximity to their stores,” Purches says.        ers may begin to see float on cash
outsourcing cash-management needs.                “With the armored service, you needed            deposits evaporate entirely. McGunn
   Because Brink’s was already provid-            fewer and fewer banks.”                          of CSS says increased efficiency and
ing transportation services to banks,                                                              accuracy also will follow.
Purches says, processing money was a              Key Benefits                                        In the long term, the same platform
logical step. That part of cash routing           While many retailers may still be at the         could extend to different parts of the
entails a “cash vault,” or a secured loca-        point where they’re considering the              store, he says; for instance, customers
tion where people actually count and              larger service of armored-car delivery,          could pay for coffee right at the coffee
reconcile paper money and coins.                  the addition of same-day credit for cash         maker—and have that cash collected and
   Brink’s developed a relationship with          deposits provides numerous benefits              credited directly to a retailer’s account.
the top banks over time, which led to             in and of itself, according to Purches of           “What if the c-store did not have a
an in-house infrastructure designed for           Brink’s. Here are a few:                         cashier?” McGunn asks. “I imagine
cash-vault services. That foundation                     Accelerates credit of funds. The          increases in sale space and an employee
allowed the company to then move to               service cuts the float time associated           that’s there to help the customer vs. act-
providing retailers with same-day credit.         with cash deposits to about 12 hours.            ing busy or completing transactions.” I




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