South Africa

Q&A: Managing cash flow and risk in your retail business

Retail trade is among the key sectors that keep South Africa's economic engine running. We have developed a sector-focused approach to support retail businesses and meet their unique industry needs.

Cash flow management

What are some of the cash flow challenges retail business owners face?

As cash flows in and out, businesses may need access to working capital solutions such as an overdraft or debtor finance, to bridge the gap between receiving collections and making payments.

An overdraft can assist you to purchase inventory, without having to wait for customer payments to come in.

Retailers whose businesses are subject to seasonal fluctuations may need access to working capital to see them through the quieter periods.

Servicing customer payments efficiently

How can retailers increase customer spend and improve sales conversion?

By offering your customers alternative payment solutions you can increase your customer spend and improve your sales conversion.

Accepting cards as a method of payment will not only assist you to grow your business, but will also provide you with the convenience of processing high-volume or high-value transactions in a secure environment.

Long queues or slow service could result in your business losing customers. You can reduce queuing time by offering card-based payment solutions and speeding up your transaction time.

A card-based solution will also help you to reduce your cash handling fees and decrease the risk of theft.

In addition, there are innovative new payment solutions that provide customers with a fast and convenient payment method, like the SnapScan mobile payment solution, and Tap to Pay.

Managing physical cash in the business

How can the bank assist in managing cash and mitigating risk?

Managing physical cash in the business presents several risks.

Having to manually count cash can be time-consuming and susceptible to human error and fraud. You also need to securely store cash on-site, and have the ability to bank large sums.

When accepting cash as payment from customers, it is worth considering solutions that will simplify reconciliation, and reduce in-store and on-site cash losses.

AutoSafe cash-accepting device eliminates the need to count notes manually with its automated note accepting capability.

The device validates and verifies the authenticity of the notes deposited, reducing the risk of accepting fraudulent notes.

Mitigating risks

What types of risks are unique to the retail industry and how can these be mitigated?

Storing cash on-site brings with it the risk of cash losses for the business. Cash can also be damaged, and there’s the risk of hijacking when the cash is in transit.

This can have a severe impact on the business’ cash flow, which is why it is important to have the right insurance cover in place when it comes to the collection and transportation of cash.

Another challenge business owners may face with growth – particularly rapid growth – is the need to hire many new employees quickly.

Often, the business owner finds out too late that as a result of time or capacity constraints, an untrustworthy individual has been hired, and the company has been defrauded.

Internal theft and fraud affect the performance of your business, and may result in devastating losses that can cripple the company.

We have multiple insurance solutions as part of our cash value proposition. These include on-site, device, cash in device, cross pavement carrier, in-transit and overnight insurance solutions, as well as an end-to-end risk transfer offering.

Next step

Speak to one of our business bankers to find out more about how we can assist your retail business and meet your specific requirements.