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How Can A Retail ERP System Improve Cash Management?

Image of cash and business data

Besides processing modern forms of electronic payments, a retail ERP system should also manage a basic and common point-of-sales transaction: cash.

Paying with cash continues to thrive along with electronic payment options like debit cards or credit cards. Shoppers pay with cash for “nearly one out of every two” purchases, according to research cited by a blog post on the National Retail Federation website.

Customers prefer to pay with cash for low-value items, such as purchases that are less than $10. In fact, since the recession in 2007, many shoppers have started using cash more for purchases. For retailers, there are some advantages and disadvantages to this trend.

For starters, there can be reconciliation issues with cash. With cash, retailers typically have many individual transactions going into their accounting records, but they usually make one lump-sum deposit with the bank. Retailers need systems and procedures to provide an accurate audit trail that shows the amount collected balances with what the system has recorded.

A retail ERP concept called “safe management” can help keep track of the details and ensure that what’s deposited from the point-of-sale systems into the safe matches the bank’s records.

While there are some extra steps associated with handling cash, in the end, cash transactions can save retailers money. Some retailers offer a tender-type discount if customers pay with cash rather than a credit card because cash payments don’t involve Payment Card Industry (PCI) compliance or credit card fees (typically about 3 percent per transaction). 

The best retail ERP systems include the ability to process and manage various methods of payment. While retailers can track electronic payments more easily, the trend shows that many customers will continue to use cash. Ensuring that your retail ERP system can also reconcile cash transactions will make it easier for more customers to do business with you.

Source: National Retail Federation, September 2013