April 22, 2016

3 ways retailers can decrease bank fees

Decrease bank fees


Bank fees are part of doing business, but because retailers often have more than one bank to deal with, these fees can sometimes become unmanageable.  To become more aware of unnecessary charges, retailers can examine a few areas of their currency operations.


1. Avoid cross-shipping.

What is cross-shipping? It’s when stores order a certain cash denomination from the bank while depositing that same denomination later in the week – or sometimes even the same day.  In our hundreds of reconciliation observations, we’ve seen retailers commit this error again and again. It stems from a lack of awareness of both the volume of and demand for each denomination. When retailers don’t have a clear understanding of how much cash they need, when they’ll need it and in what denominations, they end up spending far more in bank fees – not to mention transportation fees – than they need to.


2. Stop holding too much – or too little – cash at the stores.

In our studies, we’ve also seen individual managers or bookkeepers at the store level make “gut decisions” on the total amount of cash on hand the store needs, despite corporate policies in place. Generally, these high-value employees just want to make sure the store has enough cash to meet customer demand, but they often err on the side of keeping far too much. How much idle cash is hiding in your stores? Could that money instead be used otherwise, like earning interest in the bank or as operating capital? In contrast, holding too little means you’ll incur fees for increased or emergency change orders.


3. Prevent deposit corrections.

Everybody makes mistakes, of course, but how much do deposit errors at the store level cost you each year? Manual processes are the cause of the majority of these errors – miscounted funds, transposition of numbers when ten-keying to the point of sale, calculation mistakes, handwritten deposit slips. Even the most diligent employees are bound to slip up when creating deposits, and when they do, the bank charges a fee to correct the mistake.  Automating processes at the store level can easily help employees avoid these errors – and save time and money in the long run.


When you’ve got your eye on the bottom line, you can’t afford to leave any stone unturned. A good look at your currency operations can reveal some opportunities for improvement you might not have thought of before. Take a step back and examine how money is handled between the store and the bank – and what you could do to improve it.