As we often say, it is important to think of your cash like a grocery store would think of a box of cereal, such as Cornflakes… they’re both inventory and should be treated the same way. Having too much or too little inventory can be detrimental to your customers and your financial institution. However, inventory errors can and do occur, which create waste in the cash ordering process within your bank or credit union.
Occasionally, a branch or device may receive inaccurate inventory, which leads to a number of secondary actions to rectify the problem. These secondary actions are an additional drain on your staff’s time and can pose additional costs or risks to your financial institution.
For example, discrepancies in inventory by a vendor or a bank can cause reporting to be off and create additional communication to resolve the issue. Another example is when a branch balances the inventory in their cash drawer and incorrectly enters it into the teller platform. An error such as balancing $50,000 in the “other” category as opposed to placing it in the “$20s” category will negatively impact executive level reporting and insight into the accurate cash flow by denomination.
“Financial institutions spend millions of dollars on core platforms, but a lot of times, I'll see a branch making an actual entry error, or is just trying to take a shortcut by putting $50,000 in the ‘other category’ as opposed to placing it in the ‘$20s,’” says Kelly MacConnell, Vice President of Business Development and Client Services at logicpath “An error such as this is going to mess up any internal reporting if you're trying to do cash management on your own. You're not going to understand your denominational level inventory, so you're not going to really know what your actual cash demand is.”
According to Robert Lynch, Senior Vice President of National Financial Development at Loomis US, errors tend to occur when manual processes are involved. “An incorrect keystroke can really impact the overall reporting for an institution and waste a lot of time trying to catch the error and fix it,” says Lynch. “I recommend automating cash management tasks to minimize the errors that are sometimes happening in cash management, but can easily be rectified with the right tools and partners.”
To learn more about where to look for waste and areas of improvement in the cash supply chain, click the link the link below to download our new e-book, “The 7 Areas of Waste That are Killing Your Bank’s Efficiency.”