SVP, Chief Customer Strategy Officer Cash Connect
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How You Can Help Limit Retail Theft and Streamline Daily Accounting

For CPAs, it’s vital to be more than just the numbers person. Being a strategic business advisor and risk manager are growing in importance, especially when it comes to retail employee theft.

May 6th 2020
SVP, Chief Customer Strategy Officer Cash Connect
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Awareness of all the risks to the business and having solutions to mitigate those dangers can be great components in a CPA’s toolkit. In a retail environment, when you’re assisting clients, sometimes it pays to think outside of the box – or, in this case, a standard cash box or safe.

Employee Theft

For all-size retailers who accept cash, shrinkage and cash register skimming are very real problems. According to the National Retail Federation (NRF), shrinkage for retailers in 2018 amounted to $46.8 billion, and 33 percent of that shrinkage was the result of employee theft. If strong cash controls aren’t in place, cash receipts will grow legs and walk out the door, either in the pockets of dishonest employees or in the hands of thieves.

While your client is probably filled with trusted professionals, it’s important for owners to protect themselves from temptation, theft, and fraud by designing systems or using technology to limit these risks. One answer can be found in new smart safe technology that is beginning to replace traditional back-office safes.

Smart Safes

Anyone who’s been behind a store counter or in the back office of any business has probably seen those heavy, bulky safes under a drawer or in a desk in the manager’s office. Retail safes have been an easy way to rotate large bills out of the cash drawer and away from dangerous thieves. But at most stores, employees are the ones who move the cash, count the drawers, and deposit into the safes. This leads to temptation and increases the risk for skimming.

Internet-connected smart safes, however, are changing the way cash is being counted and streamlining the way stores can safely and accurately manage cash. A good smart safe solves these four key cash challenges:

1. Money is out of employee hands quickly – Cash has multiple touch points, and smart safes reduce these touch points. Cash usually flows from buyer to employee to cash register and back to employee who counts it, puts it in the deposit bag, and has the potentially dangerous task of taking the cash to the bank.

Smart safes cut the money handling down to three steps:

  • buyers hand cash to employees
  • employees deposit cash into the smart safe
  • the retailer receives credit for the funds validated by the smart safe on a daily basis directly into their bank account

2. A highly accountable system – Smart safes include a digital bill validator that checks for counterfeit cash and provides a real-time count of the contents going into the safe and being deposited into the bank. Many smart safes provide unique codes that track which employee deposited into the safe, ensuring cash totals match. Real-time accounting makes the CPA’s life much easier, providing up to the minute updates on cash deposits and differences that could result in losses as they happen.

3. Continuous data field for store owners – Let’s say your client or company is booming and can’t wait for employees to deposit the cash or the armored trucks to pick up the contents of the safe. You, as the CPA, need an updated report by end of day and the cash in the bank account tomorrow.

Smart safes have 24-hour data and daily bank deposit feeds. Real-time reports are readily available to see all deposits, how much money was inserted, the denomination, and when the cash was collected for pick up. Many smart safe servers will credit the contents of the safe directly to the business’s bank account rather than using the old-fashioned method of having a store employee travel with another employee to deposit the cash in the bank. This process helps ensure that employees are safe and there are fewer opportunities for cash to pass through multiple hands.

4. External theft solution – Being robbed is a store owner’s nightmare. With smart safes, it is near impossible to hand over physical cash to a thief because once bills are inserted into the secured smart safe, they cannot be extracted. Once a thief knows they are going to be unsuccessful in robbing a location, they’re less likely to go back.

Conclusion

Knowing that your client is actively protecting the business against cash theft not only gives peace of mind, but it allows more time for your client or company to focus on continuing to grow their business.

The original article was posted on the Pennsylvania CPA Journal site.

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By Michael Abrams
May 13th 2020 14:46

Excellent article and points made!

One thing I might add, however, is frequently monitoring inventory for unexplained adjustments - either up or down - and comparing the resulting COGS against the sales. It's not just the cash drawer involved; it's sorta kinda easy to skim physical inventory by having your friend come in and "pretend" to make a purchase and then settle up with you after hours.

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