Most automated teller machines (ATMs) in operation today can process millions of transactions per day. This means that your ATMs have the potential to earn you thousands of dollars per day. If you’re to run all of those transactions through just one machine, that would, indeed, make for a very big payday.
One of the major issues in ATM cash management is ensuring that you have enough funds in the system for the convenience of users, without putting in too much money that you actually lose dollars in annual interest. You have to optimize your ATM cash management to limit the residual funds in your machines and, instead, channel them toward revenue-generating opportunities.
Here are some tips to help you optimize your ATM cash distribution network:
1. Collect Data For Accurate Forecasting
The importance of accurate forecasting for ATM cash management can’t be overemphasized. Without proper forecast and management, companies are at risk of losing hundreds, even thousands, of dollars each day. It’s no secret that cash-strapped businesses are closing in on their annual operating budgets; therefore, accurately predicting ATM cash management needs is crucial.
Accurate forecasting gives a company adequate time to analyze their current situation and make decisions regarding how to best optimize revenue, minimize expenses, and maximize profit. The second component is a set of procedures and/or policies that helps employees understand and adhere to the forecasts of the business.
You have to develop policies that align with the goal of optimizing funds distribution for your ATMs. This may involve investing in cash management solutions software that can provide you with real-time data and reconciliations.
2. Take Note Of Peak Days Or Seasons
It’s a fact that people enjoy spending money during holidays, whether it’s for themselves or their loved ones. If you have a network of ATMs, you should be prepared for these peak times so that you can allocate more funds without worrying about keeping the money stagnant in the machines.
Typically, the peak season in ATM usage is during the Christmas season, specifically the months of December and January. This is the time period when most people get into the holiday spirit and begin to shop around at their local stores again. During this time, most banks and other financial institutions should be proactive and anticipate the surge in ATM withdrawals. This way, you prevent clients from getting frustrated over not being able to cash in the funds from their accounts.
Another peak season to remember is during the summer months when people usually go on vacation. Since it’ll be summer break, families will be visiting their favorite theme parks. Meanwhile, college students will be taking time off from school and head to the beach with their friends. All of these activities require cash, so ATMs should prepare for this time.
3. Calculate Idle Assets Objectively
On the other hand, you should be mindful of having too much money in your ATMs as these are, then, considered to be idle assets. Once the peak season has ended, you can return to the average amount needed for operations on ordinary days.
Again, accurate forecasting is valuable in this scenario. You should keep track of the numbers and check the data on exactly what days and seasons have the highest ATM withdrawals. Then, you can implement cash optimization strategies for your network and prevent idle assets from getting eaten up by interest rates and other costs. Instead, you can direct them to more revenue-generating opportunities.
4. Track Cash Location
You should also promote transparency from the source of the money to the location of your machines. You may have enlisted the help of armored car service to deploy your funds. However, sometimes, there are risks of internal theft since you can’t monitor the status of the cash for each delivery. The inability to pinpoint the exact location of your cash opens you up to the risk of losses. You should be able to determine where the funds are at any given time.
When the money gets deposited in the machines, the team responsible should generate a report confirming the successful transaction. You should also ensure that each ATM has a way of verifying the amount reported by the officers who are in charge of the operation.
5. Check Your Banknote’s Condition
Another crucial factor that you need to check for is if the banknotes in your ATM are in pristine condition. This means that the notes have no cracks, scratches, or blemishes, and there are no visible tears. Because notes are usually folded and tucked into the pages, they may be prone to wear and tear from this process. You should be able to see any damage and tears on the edges. The condition of the edges of the note is also something you want to look at.
Crumpled banknotes can easily jam the exit slot of your machines and put them out of service. Even a single machine that’s not working can cost you thousands of dollars in revenue losses. Be mindful of the condition of the banknotes that are being placed into your ATMs. With this, you can boost the machine’s availability and reduce additional maintenance overhead costs.
6. Consider Logistical Conflict
ATM operators that don’t have their own armored cars often have to rely on companies that provide cash deployment services. However, one disadvantage of this process is that there can be conflicts with the optimal delivery time.
In an ideal scenario, the funds should be deposited into the machine right when it’s about to run out of cash. This is to prevent any asset from staying idle in the ATM. Unfortunately, the typical situation involves spreading out deliveries since these armored car companies have a lot of clients. With this, small banks and other financial institutions have to keep up with the delivery schedule set by the service provider.
Moreover, to cut costs, they may aim to fill up their machines once a week. Plus, when the funds are depleted, they have to apply for an additional cash run, which may cost a premium amount.
Proper cash management is crucial for your ATM network. Accurate forecasting is your primary tool for staying on top of your fund distribution. Follow the tips mentioned above to optimize your assets.