A Crash Course in Cash Management

Category: Financial Planning, Education | Date Posted : August 28, 2018

Cash Management, also called Treasury Management, may sound formal, but it’s really not. Cash Management is all about helping business clients manage cash flow through a series of products and services. It could be as simple as accessing accounts online, or more complex like payroll and HR needs. Whatever the need, Cash Management provides time-saving tools to manage the day-to-day financial activity of a business, allowing the business owner to do what they do best…run their business!

Many services make up the arsenal of a Cash Management suite. They may include fraud prevention, sweep accounts, ACH origination, remote deposit capture, merchant services, and payroll services. Let’s take a closer look at what each of these is all about.

Fraud Prevention

Positive Pay

This service is designed to protect a business customer against fraudulent or altered checks clearing the business’ checking account. The business simply uploads a file into the bank’s positive pay system whenever checks are issued by the business. The uploaded file includes the date, check number and amount of each check issued. Thereafter, each day when checks are presented against the customer’s account for payment, any item where the check number and amount don’t match the information uploaded by the business, it will result in an exception. The bank then sends an email to the customer alerting them of the exception no later than 1:30am the day after the check posts. The business customer must then go into Business Online Banking before 11am that same day, review a copy of the item and then make a pay or return decision. If the customer does not contact the bank by the 11am cut-off, the default setting previously chosen by the customer to either pay or return will take effect.

ACH Filtering (or Blocking)

This service is designed to protect a business customer against fraudulent or unauthorized electronic transactions from clearing the business’ checking account. The most common type of ACH Filtering begins with the business customer providing FBFC with a list of companies authorized to debit their accounts including individual dollar limits, if desired. FBFC’s ACH Filtering software then compares any incoming ACH debits to the customer’s authorized list. Any ACH debits that are not on the list are considered exceptions. Additionally, any ACH debits that are on the authorized list but exceed the maximum dollar amount allowed are also considered exceptions. The bank then sends an email to the customer alerting them of the exception no later than 1:30am the day after the ACH debit posts. The business customer must then go into Business Online Banking before 11am that same day, review the details of the ACH debit and then make a pay or return decision. If the customer does not contact the bank by the 11am cut-off, the default setting previously chosen by the customer to either pay or return will take effect.

Sweep Accounts

Investment Sweep Account

Each night, funds above a predetermined target balance in a business’s checking account get “swept” into an interest-bearing account collateralized by U.S. government securities. When the account dips below the target balance, the necessary funds are transferred back in. It’s a simple solution to ensure the cash is working it’s hardest. Sweep accounts allow the business to maintain liquidity of funds while maximizing interest income.

Automated Clearing House (ACH) Origination

ACH Payments

This process automates payments to vendors and suppliers, virtually eliminating the cost of check printing, preparation and postage. Payments are scheduled and automatically debited from the business checking account at the business’s direction. Identifying information is transmitted to the payment recipient electronically, and voila, the funds are there! It can be used for the electronic deposit of payroll and making corporate to corporate payments.

ACH Collections

Businesses can offer their customers an effortless way to pay cable and utility bills, insurance premiums, membership dues, and other recurring payments. The business receives their money faster, while eliminating more expensive manual collection methods. When a customer authorizes the business to debit their account for payment, funds are received electronically, allowing the business to more accurately predict cash flow and increase control over their receivables.

Remote Deposit Capture

Express Deposit

Express Deposit allows a business to use a desktop scanner connected to their PC and the Internet to submit customer checks for deposit. Once the checks are scanned, the deposit is sent electronically to the account of choice. This service eliminates the need to go the bank to deposit funds, and even better, transactions made before 6pm will be applied during the current business day (weekends and holidays excluded)!

Merchant Services

Merchant Services provides businesses with the ability to take customer payments using credit and debit cards. Many financial institutions, including FBFC, will partner with a company that specializes in these service offerings. It can be as simple as a terminal connected to a cash register or computer, or as complex as Point of Sale packages, online website design or online shopping programs. New products are regularly being integrated to give businesses a state of the art credit card experience.

Payroll Services

Payroll services offer businesses comprehensive solutions to help pay their employees. Besides processing payroll, services can include benefits administration, time and attendance programs, human resources, and talent acquisition.

If any of these services have piqued your interest, or if you’d like more information about FBFC’s cash management offerings, please visit our webpage, or contact a member of our cash management team!

Date Posted : August 28, 2018