Recently, we all faced a time in the year that most of us would rather avoid – April 15th – the deadline to file your taxes or request an extension for your tax return. As I was preparing my tax paperwork for my CPA, it got me thinking that there are many parallels between this time of year, to what managers face on a daily basis when handling their store’s cash business.
Before I go any further, I need to make the required disclaimer – let me firmly state that I am not an authority on tax matters, and the intent of this article is not to offer tax advice. Please seek counsel from a tax attorney or CPA to help you with your tax planning affairs.
That being said, the following are a few parallels between tax preparation and how to best address retail cash management.
Seek Professional Guidance, if Needed
I consider myself well-versed at a lot of things, but tax preparation isn’t one of them. While my taxes aren’t that complicated, I seek the assistance of a CPA whom I trust and have used for a number of years, to handle my tax return preparation. He’s never let me down, and I will continue to utilize his services as long as he’s willing and able to serve me. For me, it’s money well spent.
For a retail store facing a myriad of cash challenges, such obstacles can be overwhelming for an organization’s employees to tackle internally. At times, it may make sense to bring in a cash management expert to help identify weaknesses in a store’s cash environment and identify solutions to address them. Such solutions may start with a complete audit of the store’s existing environment, followed by the creation of updated procedures, execution of training sessions, and the implementation of an automated system to count, store, recycle, and dispense cash whenever the store needs it.
Like a trusted CPA, a cash management professional can provide the objective viewpoint; guidance and assistance a retail organization may need to make that next leap.
Develop a Proven Plan
As we get closer to April 15, how many of us stress over what we may owe this year? We often find ourselves asking – did I make the right choices and set myself up in such a way throughout the year so that I won’t be writing the government a big check when the deadline approaches?
With a solid tax plan, which can be structured with the help of a professional, your chances of being surprised in April are greatly reduced. Given your personal circumstances, your CPA and financial advisor can help you develop a plan that minimizes your tax exposure while taking away the element of surprise when the return comes due.
This once a year time of worry is no different than a common concern store managers face. However, instead of facing it once a year, they deal with it every day. How many managers fret over discrepancies, missing funds and reconciliations when cash doesn’t balance to the point of sale data, when they are closing a shift or ending their day? When using traditional methods to manage their store’s cash, these problems never really go away.
A proven cash management system, one that employs the use of a smart safe, provides the needed level of accountability and reporting to mitigate these concerns. A smart safe is part of an overall cash management plan that helps minimize discrepancies, enable greater accountability, and reduce cash losses for the store. A solid cash management plan can put the end of day worry in the rear view mirror.
Document Search Made Easy
Another factor that may lead to stressful times as mid-April approaches is the gathering of the paperwork (W2’s, bank statements, 1099 forms, etc.) needed to prepare your return. How many of us find ourselves in a mad scramble assembling this paperwork because we procrastinated until the last minute?
One could argue that this scenario is similar to an end of day or end of shift process for a store that uses traditional methods to manage their cash. All too often, store managers find themselves rifling through receipts, tabulating manual drops, and researching discrepancies in order to end their day. This causes unnecessary delays, when all they want to do is end the day and go home. When using outdated methods to manage their cash, these manual tasks never go away.
With a smart safe, all transactions to the individual user level are recorded. In addition, if the store has programmed the safe to interoperate with the store’s point of sale system, this closes the cash management loop even further. The time required to research transactions can be executed simply and quickly by running a report either locally, or remotely. This makes the end of shift or end of day process exponentially faster and with a much higher degree of accuracy.
Audit, Anyone?
Arguably, “audit” is the last word you want to hear within the context of a tax return. It typically means that a review/examination of your financial information is required to ensure information is being reported correctly. We won’t go into the reasons why an audit may be called in this article; rather, what is important is what needs to happen in the event one is called.
Typically, accompanying an audit is a request for records that correspond with a tax return (or returns) in question. Obviously, the better you are at record keeping, the easier it will be to produce the records being requested, and the less stressful the audit will be for you.
In the context of a proven cash management system leveraging a smart safe, auditing is actually a positive effect, vs. a perceived source of concern. As discussed previously, smart safes provide complete cash tracking and accountability – as they require each user to log in with a unique user ID and password before any transaction takes place. This ensures all transactions are 100% auditable. Smart safes also have the ability to generate a multitude of reports, including past transactional data – down to the individual user – in the event any data requires an audit.
At the corporate level, recon audits are much easier to execute if the organization has deployed smart safes in its stores. Smart safes can connect to a store’s network, via Ethernet or cellular communications, allowing for authorized personnel to pull reports from several safes from a remote location, in order to execute a necessary audit.
So in effect, much like a well-organized consumer, a smart safe provides the record keeping and traceability a retail organization needs to ensure a smooth and stress-free audit.
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April is always an interesting time for folks preparing their tax return. For those that have access to the professional help they may need, supported by a solid plan, April 15th isn’t as daunting as some make it out to be. Those with their affairs in order can face April 15th with a high degree of confidence.
Similarly, retail stores that have adopted and deployed a smart safe can manage their business with a similar degree of assurance. Having a system in place that accounts for all transactions to the user level, provides customizable reports at the touch of a button, and enables complete auditability of all transactions gives store managers the solution they need to manage their business and face their end of shift/end of day with the same degree of confidence as they do on April 15th.