Taking Advantage of Bank Cash Management Technology

Advanced bank technology has been accelerating, changing the small business/banking relationship by providing large-scale cash management solutions once only available to big companies. Now any business can have access to technology that can streamline their cash management processes, improve cash flow, reduce operational costs, and strengthen customer relationships. And because these are digital solutions, a small business can implement them within days.

With the array of tools and technologies available, small businesses can target specific cash management issues or opt for a complete overhaul of their cash management processes. Working closely with their bank, businesses can tailor technology solutions to their needs, adopting them as their growth dictates.

Here are specific cash management processes that can be improved with available technology:

Optimize Receivables and Payables

Small businesses experiencing consistent cash flow problems probably have ineffective receivables and payables processes. It can be especially problematic for businesses that allow their receivables to stretch out past 30 days. And, businesses that tend to bunch up their payables to pay them once or twice a month may be letting too much cash flow leave the business unnecessarily. Cash management tools available through a business bank can streamline both processes, accelerating receivables and timing payables to optimize cash on hand at all times.

Receivables can be accelerated by utilizing an automated collection system linked to a bank’s Automated Clearing House (ACH). The system provides your billing person with a daily report sorted by age and amount owed to prioritize receivables. Payment is then collected using electronic funds transfer through the bank’s ACH system.

An automated payables system allows businesses to time their payments around the actual due dates instead of an arbitrary internal payment schedule. This enables a business to hold on to cash as long as possible and then automatically send payments through electronic funds transfers.

Accept electronic payments

For resource-strapped small businesses, chasing down and processing payments is unnecessarily burdensome and time-consuming. By offering customers a digital payment option using electronic funds transfer, you can streamline the receivables process with greater protections against fraud.

Collect payments remotely

Remote Deposit Capture (RDC) technology enables businesses to process and deposit checks more quickly for quicker availability of funds. Instead of spending resources and collecting and batching checks from multiple locations, a business can use a scanner to transmit them as a batch file to its bank over an encrypted internet connection. Banks can process and clear RDC deposits more quickly, making them available within a day or two. With most RDC systems, businesses can integrate their accounting system to streamline recordkeeping and reconciliation.

Put your cash to work

Why should you allow your cash to sit idle when it can be working while you sleep? With an automated sweep system, your cash can be automatically swept into an interest-bearing account each night. The system determines how much cash is needed for the next day’s payments and then sweeps the excess.

With the advent of secure technology and business automation, small businesses can now partner affordably with their bank as expert solution providers for all of their cash management needs. Your business banking specialists can evaluate your needs and recommend customized solutions that can put you in control of your cash flow. Call them to schedule an appointment.

 

Recent articles: