A Publication of WTVP

Managing a small business encompasses many different skill sets, including proper management of the collection and distribution of your business’s cash, a process often referred to as “cash management.” There are many different products and services available to small businesses for this purpose, which creates many opportunities to increase the safety and efficiency of your employees, your customers and your cash.

Collection Assistance
Having the correct operating account to accommodate the normal transaction volume and average balance for your small business is the most appropriate place to start your cash management journey. Many times, service charges can be offset or avoided altogether based on average account balance or transaction levels.

Then you need to look for complementary products and services to aid in the collection of cash. One such product is Remote Deposit Capture (RDC). Using a desktop scanner to deposit checks directly into your bank account eliminates unproductive runs to the bank or the need to pay an employee mileage to drive to the bank—and there is no risk of something happening to these checks along the way. With RDC, your small business can deposit checks any time, day or night. Typically, deposits submitted before the end of the business day have same-day funds availability.

Another convenient cash collection method is the ability to accept debit and credit cards for payment. Your customers appreciate the convenience and are likely to spend more when using a debit or credit card to make purchases. Most financial institutions offer your small business the capability to accept debit or credit card payments wherever your customers are utilizing virtual terminals, apps, card readers or mobile devices. This solution is also helpful for the collection of accounts receivable.

Automated Clearing House (ACH) debit files are another helpful tool for the collection of receivables. After obtaining your customers' authorizations and entering their bank account and routing numbers, an ACH file can create a debit to your customer’s account and credit your small business operating account.

Distribution Assistance
Efficient payment of your funds is another very important aspect of cash management. ACH credit files allow you to pay vendors or employees on time, taking advantage of discounts and avoiding any late payments or late charges. Other uses of the ACH credit file include making federal and state tax payments for your business.

Business credit cards allow for convenient payments while often times taking advantage of rewards or cashback programs. Many times the rewards can aggregate at the card level or the company level, offering additional incentives to use credit cards for payment. Many business credit card programs offer online access for efficient, real-time management of your card portfolio with comprehensive reporting capabilities.

Your small business operating account will offer you the flexibility of writing a check or using a debit card for payments. Often an operating account can be complemented with online banking that offers online bill payment capabilities at a nominal fee, usually less than the cost of a stamp and envelope! With online bill payment, scheduling future or recurring vendor or loan payments is simple.

Automated Tools
If your small business has excess funds each month and does not have an operating line of credit, having an investment account to sweep those funds into, in an effort to earn interest or a higher rate of interest, would be prudent cash management. Make sure your funds on deposit are either insured or collateralized if the balance is above FDIC insurance limits.

Does your small business have an operating line of credit with a balance owed? Any excess daily funds could be swept to the line of credit balance each day, reducing your interest expense. If necessary, funds can always be advanced back off the line of credit and deposited into the operating account.

Understanding the automated tools available to help you keep an eye on the collection and distribution of your small business’s cash allows you to successfully manage your cash without taking much of your time. A good cash management program can create more efficiencies, more productivity, less risk, less cost and the best possible return on your hard-earned cash. Talk with your banker about the options that are available for your small business’s unique cash management needs. iBi

The Business Services Team at Morton Community Bank can help tailor the perfect solution to your cash management requirements. Learn more at