More specifically, take Wal-Mart for instance.
They have 2500 locations, does the store in Sioux Falls, SD use the same bank as the one in Seattle?
Does each store use a local bank? If so, how does the money get to Arkansas?
I would imagine that for franchised chains (like McDonald’s), each franchisee handles their own matters, as they are an independent business that is licensing the McDonald’s brand name and recipies.
I don’t know about chains that are all owned and managed by the same firm.
Some franchisees have multiple locations, though, and in the case of McDonald’s a large number of locations are also owned and operated by McD’s.
I’m curious about this also.
What do you mean by “banking”? Like where do they deposit the cash from the register each night?
This wiki article on "cash management"will give you a starting point for info on the various options companies with large numbers of dispersed branches have in consolidating and monitoring their cash flow.
For large scale company wide financing and borrowing, they will typically go through large investment banks like Bank of America or Goldman Sachs.
That’s a good link, msmith. I recently had a job in a payment processing centre for a Canada-wide utility company; they used a lockbox service for processing the bulk of their payments, and sent the oddballs to us to get looked after, as well as us applying all the payments to the correct customers and invoices.
I would say that all the money deposited from 2500 locations will all end up in company bank accounts one way or another. My guess is a local bank to take the physical deposits and reports to the head office daily on what has been deposited, with a whole team of accountants and accounting clerks at head office to keep track of money in and out.
They could also have the local bank accounts “swept” at the end of the day. Most of it would be handled electronically anyway. You wouldn’t need a huge team of accountants.
The guesses above are pretty accurate. For each local store there is a local bank (which may serve more than one store, if there are several in the area). The local bank, however, is used mainly just to deposit cash receipts. On each business day funds are “swept,” using ACH wire transactions, from the many local banks into the bank that has the company’s main banking relationship.
For credit cards, there will be a different and somewhat simpler arrangement, in which a credit card processing company will receive the charges and wire funds, net of applicable fees, to the company’s main bank.
Came here to say the same thing. I used to audit cash accounts for some large companies, and this is indeed how it’s done.
Ah, that makes sense. I’ve never really wondered how the main bank accounts got all the money from the various deposits (I’ve usually been on the “make up the local deposits” end).
And the various locations are often encouraged to choose a local branch of a big nationwide bank, like Wells Fargo or Bank of America, because the head office has made a deal with them.
Yet another way these big chains hurt the local economy.
Rather than supporting a local bank, they support a branch of a large bank, where the profits go elsewhere. And even if they have to use a local bank, the money doesn’t stay there to help the local economy – it is swept out every day or two.