Modern Cash Management. 5 Requirements for Cash Managment Jobs

Modern Cash Management. 5 Requirements for Cash Managment Jobs

However, the current trends in banking are becoming a challenge not only for individual handicraft solutions, but also for highly successful advanced products. The growth of customer requests and technologies make the solutions themselves progress.

Developers of specialized cash managment jobs need to mobilize their resources to solve increasingly complex problems and meet market requirements. In order to be successful in this competition, a solution must be able to handle the five most important tasks.

1. Forecasting collections for cash recycling systems

One of the most important tasks is to create a forecasting algorithm that will determine the demand for the amount of cash at each point of receipt and issuance of funds. In order to create the most correct and logical scenario, development teams cannot do without highly qualified scientific personnel: for example, the demand forecasting formula for the Cash Management.iQ system was created by specialists from the Kaunas University of Technology in Lithuania.

However, the introduction of cash recycling systems (ATMs and safe-recyclers) in the banking sector has significantly complicated the task. The possibility of using the funds deposited by clients for subsequent issuance has significantly complicated the algorithm for forecasting and proper planning of cash collections.

So a single device can go through several critical cycles during the day: at the beginning of the day, there is a high probability of a shortage of banknotes due to the fact that customers will only withdraw cash. However, later on, the recycler may become overwhelmed due to the fact that small retail outlets will use devices to deposit daily proceeds.

Thus, the actual availability of the device is compromised for a significant period of time, and proper collection planning becomes a real challenge.

2. Tracking the working cycle of banknotes and coins

Requirements can change even for such a standard function of cash managment jobs as the delivery of cash from a bank vault to the end point of receiving and issuing funds.

Such standardization makes it possible to build the most efficient infrastructure for ordering, receiving and redirecting funds to end points at the level of relations between banking cash centers and central bank vaults. The staff of a bank or cash collection service, equipped with barcode scanners, performs routine logistics procedures faster and with better quality, which reduces the negative impact of the human factor.

In the short term, the strengthening of the position of standards like GS1 should allow real-time tracking of the path of each bundle of banknotes or coins within the cash circulation system of a bank or other organization.

3. Accounting and rejection of old banknotes

The life cycle of banknotes also implies a certain final point of their existence – transfer to the banknote recycling center in the central bank vault. An urgent task of the cash management system is also the timely tracking of the number of dilapidated banknotes in the system of a bank, distribution network or other organization.

Not all providers of specialized solutions allow you to adjust the level of dilapidation depending on the requirements of the National Bank, being content with rejecting only the most damaged banknotes, whose replacement is mandatory. Tracking dilapidated banknotes in the system avoids the problem by accumulating banknotes of inadequate quality at the level of regional and central vaults for further transfer to the appropriate division of the central bank.

4. Comprehensive cash collection management

The main driver for the use of cash management systems is the possibility of direct cost savings on the number of trips of the cash collection service, whose costs for personnel, transport and special equipment are very high. Accounting for these costs and optimizing the order fulfillment process requires developers of specialized software to have a deep understanding of the work of cash collection services.

Not all cash management systems allow you to create optimal routes for collection, effectively manage teams of collectors, offer several options for bypassing the end points of receiving and issuing funds to ensure security. Thus, the actual problems of the specialized money delivery services themselves remain without due attention of solution developers.

The deployment of an integrated system, including the routine operations of cash collection services, allows you to create a single organic working environment for the bank, outlet and cash delivery service, achieving operational excellence.

5. Management of cash turnover on a micro- and macro scale

The modern approach to cash management involves the organization of small, medium and large cycles of cash circulation within a financial institution. Experts identify at least four specific cycles: inside a self-service device (recycler), inside a bank branch or retail outlet, between several bank branches or retail outlets, and a cycle that includes a whole network of self-service devices, bank branches and other points for receiving and issuing cash and bank vault.

It is believed that the shorter the cash circulation cycle, the more effectively the organization manages the money supply used. With some reservations regarding the practical use of recycler devices, we can agree with this.

Modern cash management systems must manage cash flows within each cycle and provide the analytical data necessary for the development and reorganization of the client’s infrastructure (bank branches, self-service fleet, etc.). Ultimately, an important requirement for such intelligent systems, along with the provision of standard operational reporting, is the ability to conduct periodic express audits of how effectively cash is working within the client ecosystem.


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