Business Treasury Management Tips

You work hard to run your business. You also do what you can to meet the responsibilities that go along with running that business successfully – like paying your bills on time and getting paid for your products and services. But what about the methods you have in place to do those things? They might seem to work adequately enough, but could they be better? How about a lot better?

If you haven’t spent much time considering cash flow management solutions, the answer could very well be a yes. Now, before your eyes glaze over and you brace yourself for some hard core financial speak, know this: Cash flow management isn’t that complex, especially if you work with a banking partner that specializes in helping businesses run more effectively.

Basically, cash flow management refers to moving money in and out of your operating account as efficiently and advantageously as possible. In other words, it’s a way to help your money work for you, not against you. How do you do that? Consider online banking tools like the ones outlined below. They can go a long way toward helping you get cash in faster and hold on to your money longer. And that, as you’ll see, creates lots of advantages for you.

Make Payments Easy: Facilitate Those Receivables

First things first: No matter the method of payment your customers use, you can help get your receivables in faster by establishing formal payment terms. In other words, clearly establish timeframes (like net 30 days) and delineate your late payment penalties and your conditions for legal action.  

When it comes to customers meeting your payment terms, you can actually make it a lot easier for them by offering online payment options. First Business Bank Smart Pay Express makes paying you as easy as possible. Mobile and tablet-friendly, Smart Pay Express is fully secure,  and allows your customers to make one-time or recurring payments right on a custom-branded website.

Electronic funds transfer is another online payment option, which uses the Automated Clearing House (ACH) electronic payment network. Both of these options allow you to facilitate the conversion of receivables into cash and minimize float – the hold time it takes for a payment to be cleared after you receive it.

And if you should receive a physical check, you can take advantage of another helpful tool: remote deposit. This option allows you to get that check into your operating account – without leaving the office.

Getting your receivables in a timely manner can be helpful to you in several ways. For instance, it improves your borrowing base, which means you’ll be eligible for a more favorable line of credit. It also means you have more money to work with when it comes to earnings credits (discussed below).

Hold On To Your Money Longer: Pay Out Strategically

You may pride yourself on how well you stay on top of your payables, but are you operating strategically? For example, if you have an invoice due on the first of the month, rather than send a check on the 15th, you can pay via electronic funds transfer. Doing so allows you to originate payment the day before the due date. That’s two more weeks each month for you to hold on to your money. And for regular payments like rent, leases, or membership fees, you can set up strategically timed automated payments so those funds stay in your account as long as possible.

Remember, cash flow management tools are all about helping your money work for you. Case in point: Keeping more money in your account longer can turn into significant earnings credits, which can offset banking transaction fees. And that can result in significant long-term cost savings.

Nightly Sweeps: Letting Your Money Work For You While You Sleep

Did you know you can transfer, or “sweep,” money from your operating account into another account each night? Why would you want to do that? If you’re concerned about balances that exceed the FDIC threshold of $250,000, you can have your cash transferred to an interest-bearing safety account, one that’s insured up to $25 million. Or, if your main goal is to earn a higher rate of return, your funds can be transferred each night into a money market account.

Fraud Protection: Special Tools For Businesses

As you streamline your payment methods with digital options, you can also strengthen your fraud protection measures. This is especially important for businesses. Consumers enjoy vast fraud protection and coverage. Businesses, on the other hand, function under much narrower constraints and the impact of a loss can be much greater.

For example, if a fraudster manages to debit money from your business account, you have just 24 hours to report that to your bank so that the fraudulent debit can be returned. If you miss that window, you’ll unfortunately have to absorb the loss.

The good news is that you have fraud tools available to help you deal with such an event. For instance, you can submit a pre-approved list to your bank that specifies all the entities that have permission to debit your account. If, for whatever reason, a debit hits your account from a source not on that list, the bank will notify you and allow you to approve or deny it. First Business Bank ACH Positive Pay and Payee Positive Pay are two solutions designed to reduce unauthorized electronic payments and check fraud.

Mitigating debit card fraud is an important concern for many business leaders. A popular debit card fraud-prevention option is First Business Bank SecurLOCK™ Equip, an app on your smartphone that controls how, when, and where your debit card is used. This app allows you to customize your settings, for example you can set it to block any online debit card payments, restrict ATM use, set spending categories and limits, and receive real-time alerts.

The First Business Bank Advantage: Finding The Tools Right For You

“Even though we’re a business bank,” explains First Business Bank’s Scott Crist, Vice President - Treasury Management, “we still focus on making a personal connection with each client. Do our product offerings match or even exceed those of larger financial institutions? Absolutely. But the way we serve our clients is more like a community bank – thanks largely to the fact that we have such a low client-to-banker ratio. Our personalized attention helps us identify cash flow management tools that are truly worthwhile for a client. We want to provide the kinds of tools that we know a client will actually use – and ultimately benefit from.”

To really improve your cash flow management, you need to not only know about the cutting-edge tools available but also understand which tools are right for you. Partnering with First Business Bank means having responsive advisors to help you, experts who know you by name and focus on providing you solutions that fit you and your specific business needs.