While it’s tempting to adopt an if-it-ain’t-broke-don’t-fix-it approach to petty cash, you’re missing a trick if your staff are relying on notes and coins — or worse, dipping into the till — to pay for your shops’ everyday needs.
As it happens, there’s a much easier way to pay for the small, everyday purchases your shops need to keep running smoothly. Here’s a look at why you should retire petty cash, and how to put a simpler, safer, more practical system in place.
There are four main reasons petty cash should go:
Let’s say you’re in charge of a pub chain’s finances.
A bartender realises the pub where they work is low on fruit for cocktail garnishes.
Two things can happen. They either take money from the till (very bad). Or, if you operate a petty cash box, they’ll need to fill in a form (not as bad as option 1, but still bad). They then rush off to the grocer, buy the fruit, and come back with the receipt and change.
Allowing staff to dip their hands into the till is asking for trouble. It’s hard to keep tabs on spending and to rein it in if it becomes too much. People in a hurry may make mistakes. And it may also encourage theft: a 2016 study found businesses lose £1.8 billion a year because of mishandled petty cash.
But while a petty cash system is more controlled in theory, it’s still prone to errors and fraud. Plus, it generates many hours’ worth of admin.
You have to put a team member in charge of managing petty cash. Staff have to be shown how to fill request forms properly. And somebody (read, your team), will have to go through the forms and receipts, match every transaction, and upload everything to the system.
But these aren’t even the biggest issues. With Covid-19 encouraging ever more businesses to go cashless, your bartender may return from the grocer’s empty-handed.
If many suppliers no longer accept cash, most accept cards. So replacing petty cash with plastic is more practical.
That said, the type of card you use can make a huge difference.
Take credit cards. On the one hand, they’re widely accepted. The flipside is that each card has to be in somebody’s name. Which means you’ll have to issue one for a specific staff member, with other staff borrowing it when needed.
Leaving aside what happens if that employee changes jobs — you’ll have to cancel the card and issue a new one in another employee’s name — it’s harder to keep tabs on spending if several people are sharing.
More to the point, credit card providers only issue statements once a month. The upshot is that you’ll only know what your petty cash spend looks like after the fact (and once you’ve spent several hours reconciling the statements). And if you’re a chain, there’s no way of managing spending by store.
In comparison, prepaid cards are as widely accepted as credit cards. But they can slash your admin, save time, and make everyone’s lives easier. All while getting more control and visibility over your spending.
Unlike credit cards, prepaid cards don’t have to be in an individual’s name. Soldo, for instance, has non-nominative cards — cards that replace names with numbers, words, or codes.
This means you can assign a card to one staff member and easily switch to another if needs be. Alternatively, you can assign a single card to every one of your outlets, so you can keep tabs on petty cash spending by store.
Every card connects to a central dashboard, so you can see exactly what every staff member — and every outlet in your chain — is spending in real time. Staff members are also prompted to upload receipts, so there’s no shoebox of crumpled receipts to sift through at the end of the month.
You can also:
Petty cash was the height of innovation… in the 17th century. In 2020, there’s a simpler, safer, better way to manage everyday purchases.
With Soldo, you can free up your staff from forms and admin, keep a closer eye on your spending, and understand exactly where you’re spending most. That means less work, more accountability, and more accurate data you can use to budget better.
Think of it this way: why travel by carriage, when you could have a jet at your command?
Ready to ditch petty cash and get more visibility and control over your retail business’ spending?
Here’s how Soldo can help.