Is Cash Costing you Money?
We’ve all heard the saying: “Cash is King”. Businesses across the globe have been working under this premise, especially in Singapore, this is truer today than ever.
We find it perfectly normal to go buy our routinely ‘Kopi Peng” and pay cash. I even keep a coin wallet designated for this morning elixir.
Similarly, when it comes to businesses, the process isn’t all that different. Business owners are buying raw materials in cash, selling goods, and getting paid with cash-on-delivery (COD).
But what if I told you, that this ‘ride-or-die’ relationship with cash could be costing you money?
Consider these three scenarios
A customer sends you a WhatsApp message placing an order for $120 COD. You text your delivery guy to drop off the goods and tell them to collect: $120 + GST ($128.4). When the goods are delivered, and the customer pays $150, they are expecting $21.6 in change.
Now, there are a few scenarios that can happen here:
- Your driver asks if the customer has any smaller bills, but even if they pay $130, they will need to find $1.6 somewhere.
- The driver goes into a shop and buys a bottle of water to get some change and be able to give the customer his corresponding amount.
- The driver doesn’t have change and tells the customer that he’ll bring back later or that the balance will be added to their next bill.
Sounds familiar? I thought so.
Let’s ignore Option C for now since this one is just an administrative mess. How will you keep a record of the balance for future purchases, how will you reconcile the transaction against your bank account and if the driver comes back later, what impact will this have on his other deliveries or schedule?
For Options A and B, this is what will happen. You might ask the driver to bring you the cash or ask them to drop it off directly at the bank. Either way, you know that cash machines don’t accept coins, so you either go inside the bank, take a ticket, queue, and deposit it. Or keep all the coins together for later and will never be able to reconcile your transactions. Both options are time-consuming, and both options are a royal pain! (pun intended)
This is how cash is costing you money
As we know, time is money, and this is particularly true in the life of an SME owner. Without getting into a dollars and cents discussion here, just for a $120 order; your driver has lost time looking for change. This means that he is now able to do fewer deliveries and not to mention, he gets paid by the hour.
You’ve spent time going into the bank and queuing to deposit your hard earn cash or decided to use the cash machine but made a mess of your coins and therefore your reconciliation. This results in extra time spent doing your books or paying extra money for someone to do them.
Not even to mention, the extra gas and time going to the bank, the time spent looking for parking, the time writing the receipt manually and not finding a pen, the driver forgetting to tell you about the extra balance, or buying a pack of cigarettes instead of water and then having a small break, and finally misplacing several coins along the way.
PayNow is the future
All monarchies eventually come to an end, and it looks to me like there’s a new King in town. The ‘PayNow King’.
How would that work? You may ask.
- The driver arrives to deliver the goods.
- Opens the UOB BizSmart mCollect App.
- Clicks on the invoice and shows the customer a QR code.
- The customer scans it and a receipt is sent to their email.
And within 6 seconds you’ll get a notification that the money has arrived successfully into your account. Faster than it took you to read this sentence.
Not only that but simultaneously, by collecting payment via mCollect’s PayNow, your invoice will be closed, the transaction reconciled, journal entry created. All this by the time the driver put his phone back into his pocket.
The thought of driving away without your goods or cash in your pocket might be scary. But the UOB BizSmart mCollect App ensures your money arrives safely to your bank account – where it belongs!
Save time and money with UOB BizSmart mCollect and get paid faster!