The term “cashless society” is tossed around quite frequently today. Often seen as an inevitability of our high-tech world, the expression refers to a future where the use of physical currency is gradually reduced or even eliminated.
But like many prognostications, this prediction has proven to be elusive. Despite the popularity of credit and debit cards and the growth of smartphones and digital wallets, cash remains a favored form of tender.
According to the 2015 Diary of Consumer Payment Choice, a research initiative by the Federal Reserve Banks of Boston, Richmond and San Francisco, 32 percent of all U.S. consumer transactions involve cash as at least one method of payment. Hard currency clearly remains a staple of American commerce.
Accepting cash does require retailers to count, record and bank the currency, establish security protocols and maintain reserves to cover possible losses, but it also saves retailers from the credit and debit card swipe fees that cost the industry tens of billions of dollars each year.
Grocery retailer Ahold USA had even more challenges: A mammoth corporate family, many with distinct accounting procedures and systems.
The multi-branded company is the result of a 2016 merger of Ahold and Delhaize America, which was propelled by the joining of the companies’ parent entities in Europe — longtime food conglomerates Ahold, based in the Netherlands, and Delhaize Group from Belgium.
The U.S. entity operates stores under several banners within many corporate divisions throughout the mid-Atlantic region and along the Eastern seaboard, including Stop & Shop, Giant, Hannaford and Food Lion.
Ahold USA also operates Peapod, an e-commerce grocery purveyor that offers home delivery. Collectively, Ahold USA stands as a multi-billion dollar player in the U.S. grocery industry. Since it was built from a series of mergers and acquisitions, though, several different legacy point-of-sale systems were in use at various locations.
The company had been using cash handling practices that involved a lot of “hands-on labor,” says Staci Lehman, Ahold USA’s business consultant for IT systems.
“There was a manual counting process where a store associate picked up each lane’s till, counted the money and entered it into our POS system.”
She says about 18 percent of the company’s transactions involve cash. Viewed in the context of such a large company, the quantities of cash to be processed is substantial.
That’s where new software tools, developed to reduce costs and improve operational efficiencies, come in.
“Our value proposal is to streamline all those steps, from the point where cash is received as a form of payment to the moment it’s deposited in the bank to lower the cost of accepting cash,” says Beau Wysong, vice president for marketing with Balance Innovations.
VeriBalance, the company’s software platform, offers a host of advantages that are enhancing the way retailers manage their cash processes.
The platform integrates retail systems and devices that touch cash at the store level to give corporate offices a real-time view of stores, what the company calls “Store Virtualization.”
“Store Virtualization is a unique differentiator that brings all those sources together, aggregates the data at the store level and presents it to the corporate stakeholders who want to see that real-time, store-level information,” Wysong says.
The platform’s features include check conversion and cash reconciliation, which yields collective figures for the full store and individual points of sale. The program can also compute and track bank deposits.
The program uses the concept of “Store Virtualization,” which refers to the level of integration it achieves by harnessing data from divergent sources — the POS system, smart safes and bill counters.
Beyond these functions, the platform also provides vital cash analytics, revealing optimal cash-on-hand levels, plus the most strategic mix of denominations. Corporate reporting features are one of the platform’s biggest values, made possible by payment reconciliation and providing summaries of stores’ performances individually or by group or region.
Wysong points out that the platform is highly customizable, allowing configurations that will only grant certain employees access to data or reports if tiered levels of security are needed.
Optional add-ons allow staff to monitor and maintain self-checkouts, perform check conversion and keep track of the total cash and denominational breakdown within each electronic safe.
To simplify the introduction of VeriBalance, Ahold USA simultaneously adopted a new, universal POS at the time of the 2013 rollout. On the level of labor efficiency alone, the system provides significant benefits to the company.
“With VeriBalance, we no longer count our cash in the traditional manner,” Lehman says. “Retail division associates use the program’s tools to count/calculate the cash, which is thenautomatically entered into the system. They then follow up by going to the balance screen where over/shorts against the POS data are highlighted, investigated and reconciled.”
To operate with this degree of synergy, compatibility between systems is essential.
“Most of our clients do choose to integrate VeriBalance to their POS system, and we’ve yet to meet one that would couldn’t integrate with. This is a major differentiator of the platform,” Wysong says.
VeriBalance can work in a freestanding mode; Wysong says smaller clients using the program often choose to manually input data from VeriBalance to the POS.
He also points out the benefit of being able to reallocate staff hours.
“Cash office associates tend to be highly trained and trusted employees,” he says. “Streamlining these manual cash management processes frees them to focus their time on improving the customer experience.”
Of all the advantages VeriBalance offers, real-time corporate reporting is most certainly the most dominant one. The system provides summaries of stores’ performance in real time, both individually or by group or region.
A 2015 white paper on grocery retailing payments, commissioned by Balance Innovations and the National Grocers Association, examined the practices of independent grocers of various sizes and found that the most common way of reporting cash is through manual reports generated by the store, at 40 percent of respondents — 50 percent of smaller retailers. Larger retailers are more likely to use POS reporting; some companies use a mix of manual reports and bank deposits or POS reports.
The likelihood of accounting errors caused by this level of fragmentation is greatly reduced by an integrated system.
VeriBalance also represents progress in the evolution of a mature IT ecosystem. In designing the platform, Balance Innovations’ goal was to make it quick to deploy and easy for IT to integrate with existing systems.
And those are benefits you can take to the bank.
Detroit-based Paul Vachon writes for various trade publications, in addition to feature stories for consumer magazines and books on Michigan history and travel.