Retail organizations that operate on aggressive margins are constantly monitoring a number of variables to remain competitive. Two such variables are store overhead and cash flow.

In a previous blog post, we discussed the costs of cash, and how managing cash via traditional methods can negatively impact a store’s cash flow, overhead, and profitability.

In this article, we’re going to discuss the topic of daily credit. We’ll review how it works, the entities involved, and how it can positively affect a store’s cash flow, operations, overhead, and overall profit.

Daily Credit Defined

Daily credit is a credit granted to a store’s bank account for cash funds received in the store, but not yet physically taken to the store’s bank for depositing. There are numerous variables involved to enable daily credit, including equipment, technology, and third party institutions.

Players Involved

To enable daily credit effectively, there are several entities involved that work in harmony. These include the retailer, the retailer’s bank, a Cash-in-Transit (CIT) provider, and a system dashboard that enables a bird’s eye view of cash deposit activity from one centralized location. Also critical to this equation is the placement of a smart safe, one that can secure the cash, transmit the recorded deposits over a network, and feed data to the dashboard.

In most cases, the CIT provider will place the smart safe into the store and offer it as part of a bundled offering, which is comprised of numerous services, including cash-in-transit services, change orders, currency processing, reconciliation, and reporting. By working with the store’s bank and leveraging the security and communicability of a smart safe, the offering of daily credit is a tangible benefit that can assist the retailer in justifying the smart safe investment.

To enable daily credit, the CIT will typically guarantee the funds verified by the smart safe, provided the retailer agrees to the security protocols mandated by the CIT. With the funds guaranteed, the bank can then offer a daily credit for the deposited funds, the same day the recorded deposit is transmitted to the CIT and the bank. This is enabled by the safe conducting an end-of-day (EOD) transmission to the CIT. The EOD transmission represents the cash deposits, and also should match the day’s POS sales, making reconciliation much simpler and more expedient. At a predetermined time, the CIT will then transmit the file to the retailer’s bank. Once the transmission is received, the bank credits the store’s account with the indicated deposit.

Once the cash is physically transferred to the bank or cash processing center, it is then counted. But to the retailer, that activity is largely irrelevant.   Even if there is a discrepancy between what the smart safe reports and the physical count, the previously issued credit is still guaranteed by the CIT to the retailer. In other words, what was recorded in the safe, and transmitted to the bank, takes priority in terms of the amount the retailer is credited.

Why Daily Credit is important for a Retailer

There are numerous reasons why daily credit is an attractive offering to a retailer. Let’s examine a few of them:

Immediate access to deposited funds

As stated above, cash flow is critical to a retailer operating on thin margins. With daily credit, deposited funds can be used to the store’s benefit – such as paying a supplier invoice, buying inventory, and paying employees. A store no longer has to wait for the cash to be physically taken to the bank in order to use the funds they’ve received. In addition, since deposit information is transmitted electronically, no deposits are missed.

Daily credit also enables a retailer to realize a deposit one day earlier than using traditional methods (physically taking deposits to the bank). In addition, any risk regarding discrepancies now rests in the hands of the CIT.

Having immediate access to deposited funds represents a paradigm shift in how a store manages its cash flow.

Less frequent CIT pickups

With cash in the safe that is already credited to the store’s account, the store can significantly reduce the frequency of CIT pickups needed to deposit the cash in the store’s bank. In effect, the smart safe becomes the store’s bank. Third party fees, such as CIT pick up fees and bank fees, can add up fast, so reducing them even by a marginal amount can have a measurable impact on store overhead.

A closer eye on the business

With faster access to its cash, a retailer can better measure the performance of its business, in one store or multiple stores. In addition, by leveraging a dashboard, the retailer can have a bird’s eye view of all verified and guaranteed cash related activity across all safes and stores. This is a powerful tool that cannot be realized by adhering to traditional cash management methods. Having strong intelligence allows a retailer to make decisions faster and with more accuracy, which offers a unique competitive advantage.

Consolidation of bank accounts – virtual vault

A retailer that physically transports their cash deposits to the bank may be required to have several banking partnerships. This is simply due to the fact that some banks do not have branches in all areas where the retailer is present. Having several banking relationships is more costly to manage, due to high banking fees and not being able to leverage economies of scale by having one partner, vs. several partners.

With a smart safe and daily credit, deposits are recorded electronically, and the CIT transmits the deposit information to the retailer’s consolidated bank account. Where the cash is physically taken is a different subject. Oftentimes, to account for regional disparities, the bank will create what is called a “virtual vault” on the premises of the CIT. This “virtual vault” will serve as a storage repository for the retailer’s cash deposits. This helps both the retailer and the bank. The retailer can now reduce their banking relationships from several to one (or a few), thereby cutting down on banking fees. The bank benefits because it has a third party (the CIT) that can now assume the burden of physically handling and counting the store’s deposits, and this also expands the bank’s footprint. Eventually, the deposits will be transported to the bank – but the schedule for doing so is now much more manageable.

Keeping the manager in the store

With the presence of a smart safe and the power of daily credit, the manager no longer has to worry about preparing the deposit and transporting the store’s cash deposits to the bank in order to make the deposit before the cut-off time. This precious time both in the store and away from the store can now be re-allocated to more productive activities – such as training employees, optimizing store merchandise, and providing excellent customer service. To many retailers, “getting their manager back” is one of the most tangible benefits of having a smart safe and leveraging daily credit, over anything else.


Daily credit is not yet offered by all banks in all parts of the world. However, due to the benefits it provides their customers and themselves, it is rapidly gaining traction. In the U.S., for example, over 160 banks – including all of the top tier banks, are offering daily credit. Other countries are taking notice.

If you are a retailer facing some of the aforementioned challenges, speak to your CIT provider or bank to see if daily credit is offered in your area. If leveraged the right way, daily credit can play a key role in enabling more efficient and profitable usage of your cash to help manage and grow your business.