Cash Management and Treasury Management products and services are typically considered to be synonymous. They’re viewed as “just another commodity” that banks offer. However, wire transfers, sweep accounts, and merchant services are all cash management products that provide business owners with unique opportunities to increase profit, and they aren’t the same.
If you’re a business owner researching how to fix liquidity problems, here’s some information you will need to know about cash management and how it can reignite your cashflow.
What is cash management?
In a banking institution, the term Cash Management refers to the day-to-day administration of managing cash inflows and outflows. Because of the multitude of cash transactions on a daily basis, they must be managed.
The ultimate goal of cash management is to maximize liquidity and minimize the cost of funds.
Why is cash management important to my business?
When it comes to creating and sustaining a company’s financial stability, cash management is a key component. Since “cash” is the primary asset used to pay obligations (whether you’re an individual or company), it must be managed accordingly to maximize earnings. This impacts future growth for the company. Maintaining cash balances while earning a return on idle cash are also top concerns.
Most of the time, cash management can be integrated with your company’s online banking. That way, you and your business administrators have access to funds all day, every single day.
If you fully integrate your business with online banking, it will provide you with greater control of your cash flows and accessibility. This is typically customizable, as each business is different and might require a different suite of cash management options and services.
What is ACH?
Automated Clearing House (ACH) is an electronic funds-transfer system that facilitates payments in the U.S. The ACH is run by the National Automated Clearing House Association (NACHA). Most debit and credit transactions made through the ACH will clear that same day. Organizations that create these transactions are called ACH Originators.
When ACH transactions are made, they are electronic payments that are created when a customer gives an ACH originating institution authorization to debit or credit directly from or to the customer’s checking or savings account. An example would be an employer offering payroll Direct Deposit.
Is there a difference between cash management and treasury management?
In banking, both “Cash Management” and “Treasury Management” are terms for certain services related to cash flow. Though these terms are commonly used interchangeably, the scope of Treasury Management is much larger and includes a company’s funding and investment activities.
When finance professionals discuss services under the “cash management” umbrella, they’re usually referring to services such as wire transfers, sweep accounts, merchant services, and business credit options.
At Field & Main, cash management means business growth.
Here are some success stories that are a direct result of it.
Carl Powers has been a banking professional for 29 years. He’s worked with businesses of all sizes and profit margins. He’s managed to capture some special moments.
Technology & Teamwork: Maneuvering Around Money Mishaps
Carl recently met with a business owner, and after several discussions, the owner decided to establish a business deposit relationship.
The Challenge
The owner needed to make the business banking process more convenient than the other current banking partners which were more conveniently located. Given the proximity of his business in relationship to Field & Main, the solution was simple: utilize technology!
Given the nature of the business, the owner needed to reduce the amount of travel and time away from the office to make deposits. The solution was to use our “Remote Capture Deposit” service to make deposits on the same day without leaving the office.
The team at Field & Main used their problem-solving skills to establish themselves as a true financial partner with this business for life. After installing this technology, several other convenient cash management products were opened, creating additional opportunities for the organization’s future.
Implementing Proper Financial Analysis: How Field & Main Took One Business to the Next Level
When conversing with one particular business owner, Field & Main presented this question: “When is the last time your merchant credit card processing statement was reviewed to ensure competitive processing costs were being applied?”
His response was:
“This is an expected expense if customers are going to be given this payment option!”
After explaining the importance of an annual statement review, the potential cost savings, and with the bank’s local credit card representation, the business owner agreed for the bank to provide a no-cost, no-obligation, side-by-side cost comparison.
After this detailed analysis was completed, and after the comparison was presented, the business owner was finally aware of how their expenses were determined and what the potential savings could be.
Proper financial analysis can go a long way!
At Field & Main, we know that cash management builds businesses. We’re here to help you steer your cash flow in the right direction.
Whether you’re interested in Remote Deposit Capture, Positive Pay, Merchant Card Services, or any other cash management product, we can offer guidance as to how you can easily build your profits.
Learn more about cash management and the business services that we offer.
Let’s start our relationship today. Contact a Cash Management expert at Field & Main or visit a banking center near you.
