Modern Technologies for Business Cash Management

While it may seem like cash is rapidly disappearing as electronic payments spread to more and more transactions, many consumers still prefer the convenience of cash—meaning a wide range of businesses still have to accommodate them. However, managing cash creates costs and risks for businesses, including extra labor hours to count and recount bills and coins, the problem of inaccurate tallies, and the dangers of transporting the cash to the bank. As cash continues to play a vital role in transactions, understanding cash handling management and automation is crucial for businesses aiming to enhance efficiency and security.

Large-scale enterprises like grocery store chains have adopted technology to improve cash handling by installing technology such as intelligent cash-counting vaults that make cash handling less labor intensive, more accurate, and safer. “All sorts of smaller businesses with a lot of cash transactions can benefit from automated cash handling,” says Robert Norman, Senior Vice President for Cash Logistics at Fifth Third Bank. “Now, the same solutions are within reach of smaller businesses—from quick-serve restaurants and pizza parlors to building supply companies, auto repair shops, small retail shops, nail salons, delivery services, taxi services, bars, laundromats, and souvenir shops. Any business that accepts cash is a potential candidate.”

Why It’s Smart to Adopt Cash Handling Business Solutions

The share of consumer transactions made with cash has been falling steadily for years, and the shift to noncash payments accelerated with the COVID-19 pandemic. But cash was still used for 16% of all consumer transactions in 2023—more than $2.7 trillion in bills and coins—according to a 2024 study by the Federal Reserve. Only credit and debit cards account for more transactions than cash. Many older consumers still prefer to use cash to better manage spending. And cash is the only choice for a large slice of the population—23% of low-income Americans and some Generation Z and Millennial consumers are unbanked or underbanked and may not have access to credit cards, debit cards, or online payments.

These demographic trends underscore the necessity for businesses to modernize their cash-handling strategies to meet the needs of all consumers. Regulators are interested in making sure that companies will continue to accommodate cash customers. The proposed Payment Choice Act, first introduced in 2021 but not yet passed by Congress, would require all businesses to accept cash payments for any transaction worth $500 or less.

The Pitfalls in Traditional Cash Handling

Small businesses, which are most likely to have a higher share of cash customers, are also most likely to be handling cash the old-fashioned way. This involves manually counting at the end of the day, recording daily receipts in a ledger or an accounting program on a computer, and then transporting cash to the bank. All these steps make cash handling time consuming, costly, prone to errors, and risky.

Consider the cash-handling burden for a mom-and-pop business like a neighborhood restaurant. An employee takes the cash tray back to the office, counts all the bills and coins, and writes down the tally. The manager checks the tally. Then, the manager leaves the shop to deposit the cash and coins at a nearby bank branch, where the tally is checked again.

The biggest cost in manual cash handling is labor. You’re using employee and manager time to count and recount. The manager has to supervise the stocking of registers with cash and switching out cash drawers with shift changes. The manager may also have to arrange the cash transfer to the bank and track the deposits.

The Benefits of Cash Solutions

Modern cash-handling services, such as Fifth Third’s Currency Processing Solutions, offer three important advantages for small businesses:

1. Labor savings. The time it takes to collect, count, and recount cash, plus the time it takes an employee to take the cash to the bank, all adds up. “In a quick-serve restaurant, that might be two hours a day,” says Norman. “For a big retailer, it might be eight hours.” With a modern cash-handling solution, most of the labor is eliminated. Bills and coins are fed into a machine that accurately counts and records the amount. The cash is stored in a secure safe that can’t be opened by anyone in the store. Every time cash is loaded into the machine, a built-in computer tracks the amount and relays the data to the bank, so there is no manual bookkeeping. The cash handling technology allows employees to focus on more value-added or customer-focused tasks.

2. Loss prevention. The more hands that handle cash, the more opportunity for loss. Business owners don’t like to talk about it, but “shrinkage” is a real issue—cash paid by customers that never makes it to the bank. One convenience store chain with 500 locations was losing $12,000 a month from shrinkage before it introduced a modern cash-handling solution. Now the company estimates that losses have been cut to $12,000 a year. The risk of robbery when employees carry cash from the store to the bank is also reduced with a cash automated solution. Some small businesses count cash daily but only deposit cash once a week, which means that an entire week’s receipts could be lost in a robbery.

3. Faster access to working capital. A key benefit of modern cash handling is getting deposits into the bank faster. Small businesses live or die on working capital—to pay suppliers, to pay employees, and to pay the rent. And the No. 1 cause of small-business failures is lack of capital. The modern cash-handling solution helps small businesses maximize working capital. Every day, the system automatically relays data about the latest cash count to the bank. There, the funds are immediately credited to your account, even if the cash is not physically transferred to the bank until the end of the week.

How It Works

Large retail chains have worked directly with cash-counting hardware and software vendors, banks, and armored car (cash in transit or CIT) services to develop their sophisticated cash-handling setups. It can be quite challenging to put together such a system, so a managed service can make more sense for many small enterprises. A single service provider such as Fifth Third Bank can provide all that as a service. How Fifth Third Currency Processing Solutions^®work:

• At the end of the day or during a shift change, all the bills and coins in the cash registers are collected and fed into a secure cash-counting machine, which can only be unlocked by the CIT service.'
• A built-in computer automatically relays the cash totals to the bank, where the amount is immediately credited to the business’s account.
• The bank dispatches an armored car on an agreed-upon schedule to pick up the cash and coins from the vault.

The bank sets up the hardware and software, trains employees, arranges armored car pickups, and provides ongoing service and maintenance.

As businesses navigate the complexities of cash management, leveraging automation can lead to significant improvements in labor, efficiency, security, and profitability. By understanding the diverse needs of consumers and adapting to market trends, companies can position themselves for success using a cash logistics service.

To find out more information about Fifth Third’s Currency Processing Solutions, contact your relationship manager or find a banker.