As a business owner, you’re always looking for opportunities to grow and improve your business. Your bank’s cash management team, sometimes referred to as treasury management within the financial services industry, is the group that provides business efficiency and financial solutions.
What is cash management?
Cash management helps business owners better manage their businesses. In addition to overseeing a business’s financial assets, cash management consultants can mitigate risk in day-to-day operations. “If you think of an umbrella, cash management is a segment of the umbrella that a lot of business owners aren’t aware of. It makes running their business easier and more secure,” explains Morris Jackson II, U.S. Bank SVP of Consumer & Business Banking. Simply put: Cash management can help in saving business owners time, money and stress. Wondering if cash management is right for your business? Book a consultation with a business banker at U.S. Bank to learn more.
What cash management services and products are available?
Because all businesses and business owners are different, cash management isn’t a one-size-fits-all solution. “Cash management is like going to a restaurant and ordering à la carte,” Jackson explains. “There are customizable solutions that a consultant can put together to fit exactly what the business owner is looking for.”
Those services and products include:
- Remote Deposit Capture: Especially beneficial for businesses that deal with a lot of checks, remote deposit capture solutions, such as mobile check deposit or on-site electronic check deposit, save time by allowing deposits to be made from the comfort of your own office.
- Accounts payable: Not only does an accounts payable system automatically pay your vendors so you don’t have to, it can also strategically optimize your payment schedule. “If a vendor gives you 30 days to pay, why not use all 29 days? That way, through those 29 days, you could use that capital for something else that allows you to grow your business. Then you can pay on day 30, and cash management will make those payments for you,” Jackson says.
- Liquidity management: Cash management creates efficiencies with your collections and payments systems. “It’s a liquidity manager, helping grow your business and making it run more smoothly,” Jackson says. “It also enables you to understand availability of funds to make certain you have enough money [for the purchases you need to make], whether it’s equipment or inventory.”
- ACH credits and debits: ACH, or Automated Clearing House, is a form of electronic payment that allows you to automatically debit or credit a bank account.
- Vault services: “If your business is cash-heavy, and you want to reduce the risk of moving cash from your location to a bank, vault services is another offering through the platform,” Jackson says.
- Merchant payment processing: Allows a business to accept credit — such as Visa, Mastercard, American Express and Discover — as a form of cash.
- Wire services: Some vendors — especially if they’re located overseas — prefer to be paid via wire services. By setting up a wire transfer platform through cash management, you eliminate the need to make these transactions at a bank.
- Corporate credit cards: Rather than dealing with petty cash or writing checks to employees for on-the-job expenses, cash management can set up corporate credit cards, giving employees access to funds in a controlled way. “If the business owner only wants employees to have access to gas stations, I can set up the credit card do that. If business owners want to give employees a limit of $50, I can set that limit,” Jackson says, noting that this can reduce occurrences of internal theft and fraud.
What type of business is a good candidate for a cash management system, and what are some of the benefits?
You don’t need to be a Fortune 500 company to take advantage of cash management services. “To be honest with you, I think almost every business owner can find benefits,” Jackson says. Even if you only want to implement one or two of the cash management services, the impact on a business can be huge. It can help you:
- Identify areas to reduce operating costs and avoid liquidity shortages
- Create time efficiencies by automating tasks
- Streamline payments and receivables
- Grow your business by creating new opportunities, like being able to accept various forms of payment
- Mitigate risk by putting controls in place, such as limiting employee spending and granting oversight on business decisions
Overall, Jackson says, “Cash management can help alleviate stress or pressure, by providing better planning, organization and control of funds fueling business growth.”
What are the first steps for implementing cash management in a business?
Start by reaching out to a bank representative, who can schedule a meeting with a cash management consultant. Gathering information like quarterly, mid-year or annual financials can be helpful in preparation for the meeting, but it’s not necessary.
“The consultant has the experience, knowledge and skills to ask the appropriate questions to identify cash management options that will add value to your business,” says Jackson.
Book a consultation with a business banker at U.S. Bank to learn more.
Editor’s note: This article was written by our partners at U.S. Bank.
Credit products are offered by U.S. Bank National Association and subject to normal credit approvals and program guidelines. Some restrictions and fees may apply. See a banker for details. Equal housing lender.
Deposit products offered by U.S. Bank National Association. Member FDIC.
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