What exactly is cash management? Simply put, it is the process of managing revenues and expenditures that flow into and out of any business. It takes many shapes and forms, for all different types and sizes of businesses.

In years past, the standard process was relatively simple: the business collected cash or checks from rent payments, sales or operations and then went to the bank to deposit the funds. In many cases, a lag would occur from the time a sale was made, or services rendered, to when payment was received. Once revenue was received and deposited, payments would be made by the business in the form of checks to vendors and suppliers. Knowing when payments would be made to your business and matching that up to when your business needs to pay expenses, became a challenge – known as “timing difference”.

Businesses face that same challenge today. The good news, though, is that there are a number of solutions today to the age old “timing difference” that weren’t available 20, 15, or even 10 years ago. Financial institutions have invested extensive resources in technology that allow business clients to “speed up” the collection of receivables (inflows) and match that up with payments to vendors/suppliers (outflows). Thus, bridging that timing difference, increasing the efficiency of operations and ultimately saving the business money. What are some of these solutions?

• Online Banking – Provides the ability to view account balances on demand, so reconciliation can be done daily, instead of monthly. Funds can be transferred instantly with a simple click of a button, so they can be in the account they need to be in, when they need to be there. Electronic statements are available and easy to access, saving time and paper. Many banking functions can now be done online and on the go with the use of online banking.
• Electronic Transmission of Funds - The ability to send money electronically and automatically, to individuals, businesses, vendors, suppliers, etc. This can help decrease the need and expense of checks and postage.
• Electronic Collection of Funds - Collect payments from customers/clients, allowing you the ability to know exactly when you will be paid, bridging the timing difference. Customers can be set up for recurring payments, reducing collection expenses and challenges.
• Make Deposits Directly from your Business - With remote deposit capture, you can deposit checks directly from the office. This service can provide a huge savings of employee time, travel expenses, and an increase of efficiencies within the office.
• Credit & Debit Card Acceptance - The ability to take a credit or debit card as a method of payment from clients and vendors, in person, over the phone, or online.
• Business Credit Card - Make purchases of office supplies, gas, etc. with varying rates, repayment terms, and rewards options. A great way to track expenditures.
• Fraud Prevention Services – These services offer ways to aid in protecting accounts against fraudulent activity and to manage account transaction history.

The need for these services transcends across all different business sizes and sectors. Many business owners will tell you that cash management is critical to the vitality and success for their business. Since the onset of the pandemic, cash management services continue to offer solutions and alternatives to keep many businesses running.

Though, with all the great technology available, it still comes down to people. Individuals that will help you set up these useful services, train and educate employees on their use, and be there for support when questions arise – that is the great differentiator of services. In addition, a support staff that is at the cutting edge of technology – as new and more efficient ways to manage money evolve in the future. Ultimately, it is the relationship between the bank and the business – partners in its health and success.

Contact Bethany today to learn more about CNB’s Cash Management Solutions and how they can benefit your business.

©2021 Broadridge Investor Communication Solutions, Inc. All rights reserved. This material provided by Bethany Arnold.