Provisional in-store credit. Worth it?

A reality!

 That dream is becoming a reality!  A number of banks now work with armored transportation companies to accelerate the usefulness of your deposit. Remember, to use your cash you have to move it to your main bank account . . . where you write checks, borrow and invest. 

 Just like squeezing a balloon, though, every action causes a reaction. You might consider these points before allowing a single feature to drive your decision: Top of envelope Provisional Credit

When will I get use of my  cash and what’s the value proposition?

  •  Find out exactly when cash customers give you on Monday will be available for use. Lay out on a spreadsheet a full month’s revenue, with and without provisional credit. Compare today’s cash flow with all your vendor options. (I say, “all your vendor options,” because they might vary in when you actually see the funds post to your main bank account.)
  • Will your carrier adjust your schedule, if you wish to reduce service days? One big benefit to provisional credit from the safe is that you don’t necessarily have to move the cash as often. Find out how that will impact your price per stop.
  • Is there a negative impact on life safety? Does the additional cash make a location more vulnerable?
  • Do you have sufficient cash storage capacity in your smart-safes to make this work? Make sure you look at your peak periods, and the longest spread you have between pickups. More importantly, plan for failure!
  • What adjustments have to be made to your change funds? Assuming you adjust the frequency of pickups, how much additional change do locations need, and will this impact your bank fees?

There are soft benefits to provisional credit, too. Consider snow storms and freezing rain. You will worry less about your armored carrier showing up late since your cash will already  be on its way to your main bank, electroncially . 

Is it worth it? 

Do the old “Ben Franklin T-account” you learned in accounting class. Your decision should include the financial analysis. Before any one feature drives your decision, make sure to look at the numbers.

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