The Power of Balance
Retailers count on Balance Innovations to boost cash office management efficiency and accuracy.
11011 Eicher Dr.
Lenexa, KS 66219
Type of Business
and Cash Office
Year Founded 2004
Keys to success
“We deliver real value to our customers that is measurable.” -Keith Molzer
Cash flow is important for any business, but for Balance Innovations it is their business. The Lenexa-based company provides revenue reconciliation and cash office management solutions for the retail industry.
Basically, Balance Innovations’ hardware and software tools track and reconcile retail payments from the cash register to the back office—all the way to the bank.
It sounds simple enough: a customer in a retail store pays for a purchase with cash, check, credit card or other form of payment. If a credit card, the information is forwarded electronically for processing.
If cash or check, the cashier places physical tender in the register drawer, which eventually is taken to a back room where all forms of payment are reconciled with the transactions recorded by the registers.
While seemingly simple, the process can cause headaches for business owners and managers.
One of the biggest issues for retail businesses is that counting cash, handling checks and reconciling transactions is a time-consuming process, particularly for high-volume retailers.
“Most retailers, especially large grocery and supermarket chains, could spend anywhere from five to eight hours a day actually counting all that money. So, it’s very labor intensive with lots of errors,” said Keith Molzer, president and CEO of Balance Innovations.
Balance Innovations automates the process from the time the cash drawer leaves the register to the time it goes back in with the right amounts of cash to begin the next day. Balance Innovations’ flagship product, VeriBalance, counts and records all payment forms, including cash, checks and coupons. The system can determine how much of the cash on hand should go to the bank and how much is needed to begin the next day.
In an industry where margins are thin, Balance Innovations can provide a quick return on investment for customers such as Hen House, BI-LO and Boscov’s. Other customers include eight of the top 20 grocers and six of the top 20 retailers, including three Fortune 100 retailers.
Beyond Counting Cash
Balance Innovations began life in the mid-1990s as Veri/Cash, a technology solution for counting cash. But the company struggled to find its footing until Molzer recognized the unrealized potential, pulled together a group of investors and bought the company and its intellectual property in 2004.
Molzer was a natural to see the vision for what the company could be. As a freshman in college, he launched a screen printing business, and was an experienced entrepreneur by his mid-20s. Molzer turned his attention to helping other entrepreneurs by providing consulting services and working as an advisor to state and federal entrepreneur and technology programs.
Veri/Cash was a customer of his in the late 90s. While the former owner had developed a technology solution to “count cash quickly,” it didn’t “account for cash,” Molzer said.
Several years later when the company was struggling, Molzer looked at the system and said, “This could be so much more.” So, he targeted the company for turnaround and growth by extending the reach of the technology.
“There were devices out there that counted money—that said, ‘You have $60,000.’ Well, so what,” Molzer said. “Our system says, ‘You have $60,000, here’s who touched all of that $60,000, and, by the way, here’s where that $60,000 needs to go. And of that $60,000, let’s keep $8,000 of it back here because you actually need it to run your business tomorrow.’”
Molzer and his team expanded the scope, wrote proprietary software and turned “counting cash” into “total revenue reconciliation.”
Ringing Up Results
The results have been significant. Molzer has grown the company from five employees to 70, and installations have grown to about 7,500 sites—accelerating over the past two years, in particular.
In building the company, Molzer’s strategy began with listening to customers and learning what their “pain points” were.
“We went out to customers and said, ‘How can we help you,’ rather than most companies, which say, ‘Here’s how we can help you.’”
One eye-opener for him was that a lot of retailers didn’t know how much cash they have on hand by denomination at any given time. They don’t have systems to track and account for cash in their registers and in their safes down to the penny. They also lack systems to best manage the money on hand.
“Our sweet spot is leading retailers who want to be better operators and want to improve their operations and increase their bottom line through operational efficiency and better cash office management,” Molzer said.
Try Before You Buy
Balance Innovations’ business development model is somewhat unique, more akin to online software purchases than installations of complex hardware and software systems. It is based on Molzer’s belief that if potential customers try Balance Innovations’ solution, they’ll buy.
Before a potential customer pays a dime, the Balance Innovations team will assess the customer’s needs through onsite observations and then will customize VeriBalance to that company’s unique operations and point-of-sale system. Balance Innovations will then install the necessary hardware and software systems for a three-month trial period. If potential customers aren’t happy with the system, they don’t have to keep it and they aren’t out any money.
“Our pilot philosophy is let’s go in and find what’s wrong, prove to them that we are going to be their best partner—we’re going to deliver,” Molzer said.
Molzer has an ace up his sleeve that gives him the confidence to make that upfront investment in potential customers. Unlike many technology systems that may take years to pay for themselves, Molzer said most customers will recoup their costs in six months to a year. The savings for companies is in reduction of both time and errors in revenue reconciliation by automating the back office process and integrating with the point-of-sale system.
“We take that six- to eight-hour process and get it down to an hour or two-hour process each day,” he said. “So, we’ve eliminated a lot of labor and we’ve taken all the errors out, because we’re doing it all electronically as opposed to manually.”
Molzer said most potential customers recognize the value during the three-month trial, and in more than 90 percent of the cases, he said, they implement the system.
Molzer acknowledges that the approach has significant upfront risk for Balance Innovations, but it has allowed the company to build long-term relationships with customers, which results in 100 percent contract renewals.
Counting on the Future
Balance Innovations is still very much focused on building relationships in North America, and for good reason. With more than 100,000 large retailers in the United States and Canada, it is still a huge market. But with a French Canadian version on tap for Quebec in early 2012, Molzer sees more global opportunities on the horizon.
“We know there’s a big global market for our product,” he said, “but by the same token, there’s still a great market here in North America.”
So Balance Innovations is growing strategically, making sure they continue to provide outstanding service to existing customers while capturing more of the North American market and building a platform for global growth.
“We just started to look at how we go international: what are the right markets for us, and who are the right partners.” Molzer said.
He said that kind of strategic, thoughtful growth—making smart decisions—is the key to success.
“We know who we’re going after, why we want to go after them, and that’s allowed us to grow very strong financially, to be a very profitably run organization. It gives us a great foundation to get much bigger, much faster long-term,” he said.
That measured growth and strategic focus allowed the company to weather the recession. Balance Innovations has continued to grow in installations and headcount each year, and the company has continued to invest in new technology and new products.
Molzer said that Balance Innovations even benefited from the recession, because large retailers shifted much of their focus and investment from expansion to being more efficient and cutting operational costs.
He emphasizes the long-term payoff Balance Innovations provides.
“When somebody implements our product, it’s not a one-time win, it is ongoing—you are going to save this on an annualized basis from now until the end of time,” he said.
Building those long-term relationships with customers supports Molzer’s long-term strategy to grow the company into a leading provider of revenue reconciliation solutions for top retailers.
“My philosophy is that we don’t make short-term decisions. We’re going to continue to build a sustainable organization that enables us to grow exponentially, develop new solutions and get into new industries.”