Scale up your retail outlets by overcoming 4 usual mistakes.
For a large retailer with multiple chain outlets distributed across the country, it can become very difficult to track and manage operational expenses incurred at each store. Multiple inefficiencies may crop up due to logistics and a lack of visibility. Let’s look at what the four major cash management concerns are for retail outlets.
1. DISTRIBUTING PETTY CASH
A retail outlet may have a host of small, unexpected expenses in the course of its operation. Snacks for employees or customers, store repairs, stationery etc are some of the expenses outlets typically see. Retailers must maintain some cash to be used for these ad-hoc expenses but distributing these funds is difficult, especially for a large chain that is spread across the country. A host of retail chains in India employee couriers who physically deliver petty cash to each outlet but getting cash this way is inefficient, time-consuming and labor intensive.
“Hiring resources just to manage store expenses wasn’t feasible”- R. Manjunath, Finance, Health & Glow
2. SEPARATING SALES CASH FROM PETTY CASH
Due to a lack of cash in hand, sometimes store operators take cash from the counter to use for ad-hoc expenses. This practice is unfavourable as it often leads to errors in accounting. It could also lead to cash shortages and unreported expenses which directly affects the operating margins, removing visibility and control.
“The problem was I was not able to bifurcate what is my cashier’s amount and my petty cash amount.” – Radhakrishnan LN, CFO, Soch
3. REPORTING OPERATIONAL EXPENSES
Retail employees also have a hard time reporting expenses incurred. Since most of the retail chains have manual processes for reporting petty cash expenses, approval, verification and reimbursement is a tedious process with a lot of back and forth between retail outlets and the head office. Often employees or store managers have to travel to the regional office to get report expenses and seek reimbursement.
“Employees would typically spend Rs.50-100 on travel each time they visited the head office to submit expense vouchers or collect reimbursements” – Raghav Verma, Co-Founder, Chaayos
4. PREVENTING CASH LEAKAGE
The lack or delay in visibility of expenses brought forth by manual processes followed in the retail industry means most retail stores are very vulnerable to cash leakage. The practice is so prevalent that retailers treat cash leakage as a part and parcel of operating a chain.
“There was a lack of control over the cash being spent” – Griffith David, CEO, Habanero
A solution that could provide retail offices a centralised view of the cash being distributed and expenses being made, while streamlining the cash distribution and reimbursement process for employees could eliminate such cash management problems. Retailers who have been quoted above such as Health & Glow, Soch, Chaayos and Habanero among 3500 other such businesses have tried out Happay to solve their cash management problems. Through Happay they have been able to gain control and visibility, eliminating cash leakage and improving productivity in the process. Know more here.
“Tailor made solution for petty cash” – R. Manjunath, Health & Glow