How implementing a digital cards strategy can reduce theft and increase productivity
Petty cash could soon become a thing of the past. The idea that a business has a physical cash box stuffed with notes, coins and receipts seems a little archaic today, especially in a world of contactless cards and mobile-enabled payment technologies. So why do some businesses still use them?
Despite perennial stories of theft, petty cash is convenient – hard cash, hard receipts, no messing about with bank cards and charges. But what if petty cash could be managed digitally, conveniently and more securely? What if there was a better way?
Improved control and processes
Removing the potential for petty cash abuse would give management peace of mind. Not only that, but it also frees up employees to go about their jobs more efficiently. Technology to capture digital copies of receipts would mean no loss of payment evidence, while virtual cards with one-off payments would mean no chance of overspend or abuse. Not to mention the process of topping up the cash float.
In short, a digital cards strategy could not only save businesses money, it could improve processes, reporting and accountability. So, what’s the catch?
Sometimes getting the balance between corporate control and staff empowerment is difficult to manage. Nowhere is this more obvious than in expenses and financial management. Times are changing and technology is enabling greater controls and freedom. Adopting a digital approach should reduce pressure on staff and management by opening a line of transparency. Staff are given the freedom to spend within parameters digitally set by management, limiting misunderstanding and promoting trust.
Crucially, the same technology can reduce costs for traditional purchasing. The usual PO number and invoice approach can be consigned to history along with the petty cash tin. More businesses are starting to see the benefits of moving higher value spend to cards. It means that businesses can be more up to date with cashflow analysis and customers are happier with earlier payments. The overall visibility of payments means that management can make more informed decisions based on more accurate information.
Improved visibility and compliance
Today we’re seeing a more holistic approach to spend management, where companies are looking at the actual cost of doing business – including expenses, payments and invoices, however high the value. Low value spend has been the first target, as inefficient procedures mean transaction processing costs can be greater than the value of the spend. This means that businesses are taking a more intelligent approach to spending, improving visibility and compliance and, where possible, empowering employees.
As spend amounts become larger, the needs of organisations change to become more about working capital and enhanced control. We are seeing innovative card-based solutions meeting those needs and driving a trend for higher value spend being paid on virtual and lodge accounts, including one-time card payments (single use cards).
Technology is making this all possible. It reduces pressure on staff and on management, enabling companies to do more with less. Given the current economic climate, that can never be a bad thing.