How Smart Safes & Provisional Credit Helped Ace Hardware Manage their Cash Flow
Updated: May 23, 2021
A Cash-Flow Problem
Ace Hardware franchise co-owner Stuart Compton had a problem. His Portland area Ace Hardware locations were accepting large quantities of cash but could only make bank deposits once a week. So, every Friday Compton would find himself nervously transporting cash and coins to their bank.
“We needed a solution that would positively impact our cash flow, while increasing security at the same time.” -Stuart Compton, Ace Hardware
The process created cash flow issues while the money was sitting in safes at their stores rather than in the bank working to benefit the business. But, more importantly, it was a safety concern. Both Compton and the business were put at risk in those weekly jaunts to their financial institution. They needed a solution – one that would increase the businesses cash flow while improving security.
Enter Peregrin Financial Technologies’ Smart Safe Solution
Peregrin Financial Technologies offered Ace Hardware the opportunity to try out a unique cash safe system at one of their two franchise locations. The new state-of-the-art safe, the Triton VersaSafe®, would provide the bill storage they were used to with a host of additional features including tracking, counting and bill verification.
But the real benefit was the VersaLink® software coupled with Peregrin’s provisional credit and armored car services. This unique service went above-and-beyond what any local bank could offer.
“We saw a real need with local businesses for provisional credit for cash,” said Kathryn Friend, Chief Operating Officer with Peregrin. “Because financial institutions were not offering provisional credit, we stepped in to provide daily deposits for merchants with our Smart Safe program. The business gets daily credit for the money in the safe and, once a week, the cash in the safe is picked and we recoup the funds we’ve deposited into Ace’s bank accounts.”
“Because financial institutions were not offering provisional credit, we stepped in with our Smart Safe program. The business gets daily credit for the money in the safe and, once a week the cash is picked up and we recoup the funds we’ve deposited into Ace’s bank accounts.” - Kathryn Friend, Peregrin
With cash deposits to the Smart Safe tabulated as they were entered, Ace Hardware is now able to easily balance out the day’s receipts without having to count cash and fill out any bank paperwork. Then, as their provisional credit for the funds are deposited the next day, they can rely on the income being in their bank account to pay vendors and handle weekly, daily, and monthly expenses – all without the worry of personally handling and transporting large quantities of cash.
A Beneficial Relationship
Peregrin’s Smart Safe program has not only improved overall cash flow, it has provided a safer and more efficient way for Ace Hardware to manage their cash handling system. Compton no longer finds himself spending hours counting cash, moving money, or worrying about when the funds will be in the bank.
“Cash [handling] doesn’t really make us any money,” said Compton. “What makes us money is attending to our customers in the stores. The decisions I make on purchases and merchandising and communicating with our staff directly benefits our bottom line. The Smart Safe with provisional credit program offered by Peregrin frees up my time to run the business.”
“With Peregrin’s Smart Safe program, we’ve solved our cash flow problem and it has provided us with a safer, more efficient way to handle cash.” - Stuart Compton
After the trial, Ace Hardware quickly moved to implement the program at their second store. Six years later, the franchise has grown to five locations - all using Peregrin’s Smart Safe services.
“It has been a great relationship,” said Compton. “One we plan to continue as we grow our locations, which we are looking into even now.”