Cash in the bank – it’s certainly a comforting feeling for any small business owner. But, too much idle cash doesn’t always make good business sense.
Sure, any well-run business focuses on solid collections – making sure it receives what it is owed. But what sets successful companies apart is that they not only collect the funds – they then put that money to work for the business.
Using the right business banking solutions1 can add efficiencies to the way you handle cash and also strengthen your bottom line.
Step 1: Start with Efficient, Cost-Effective Collections
Uncollected revenue not only impacts your cash flow, but it can also increase labor costs. Just think of the revenue-enhancing functions your team could be performing if they weren’t dealing with paper invoices and checks, filling out deposit slips, and making trips to the bank.
Among the tools that businesses can use to automate and streamline the collections process are:
Remote Deposits – Also known as remote deposit capture, this technology allows you to “digitize” checks using a desktop scanner. These digital checks are then sent to the bank using a secured internet connection, eliminating time-consuming trips to make manual deposits. With Remote Deposits, you can enjoy faster access to funds and instant access to account information. Accelerated check clearing can also help reduce the risk of fraud. It allows returned items to be identified sooner, thus enhancing the collection process.
Lockbox Services – Lockbox services are an efficient and reliable way to process customer payments. Payments are directed to the bank, where they are opened and scanned. Checks are automatically processed, and downloadable data files are provided for reconcilement. You can log into a secured file transfer protocol (FTP) site to view images of checks or invoices on the day of deposit. In addition to reducing mail time and speeding up funds availability, lockbox services are beneficial in reducing the opportunity for fraud. Funds are sent directly to the lockbox, as opposed to being left lying around the office.
Step 2: Maximize the Return on Collected Funds
Collecting the money your business is owed is only half the battle – putting those funds to work is just as critical. Here, smart business owners are using technology to put collected funds to work quickly and efficiently.
Sweep Account2 – Your business can maximize returns by automatically transferring excess funds from operating accounts to an interest-bearing account. Funds not needed at the end of the business day are “swept” into an investment account. As funds are needed, monies are automatically “swept” from the investment account back into the checking at no cost. Daily reporting is available through edoor, our dedicated Treasury Management Internet Banking system, detailing sweep account activity, balances and interest earned.
2. Funds swept into any of the automatic investment choices are not guaranteed by Nevada State Bank, are not insured or guaranteed by the FDIC, are not insured or guaranteed by any government entity, and do involve risk including the possible loss of principal. Prior to investing, you should read the prospectus carefully.
Step 3: Strategically Schedule Your Bill-Paying
Strategically paying bills is another way you can retain funds longer in revenue-generating accounts. This is a key component of what is generally referred to as “cash concentration” – retaining funds as long as possible by planning disbursements to arrive just in time to meet payment deadlines or to take advantage of prompt-payment discounts.
Automated Clearing House Services – ACH services can be utilized to create payments online – on an exact payment schedule – from most accounting software. Costs are very low, typically a few cents per transaction.
Zero Balance Accounts – Simplify the management of multiple checking accounts while consolidating funds in a single concentration account. Automatically fund disbursement accounts daily as needed.
Integrated Payables – Paying invoices in different ways can sometimes be a hassle. Integrated Payables helps make the process easier by importing invoice information from your accounting software and allowing you to make your payments from one place. Your vendors can email invoices directly into the Integrated Payables system. Whether your vendor asks for ACH, check, or credit card, all can be paid from one location, and the bank can prepare and mail your checks.
The Bottom Line on Your Bottom Line
Banking technology can improve business efficiency and help strengthen your bottom line. To find out more, please contact the Nevada State Bank Treasury Management Department by phone at 800-693-7695 or by email at NSBTreasuryMgmtSales@nsbank.com.
1. Certain products and services may require credit approval, applicable agreement or contract and fees may apply. See banker for details.