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Four cash flow tools for small businesses

Running a small business is all-consuming — responsibilities like paying bills on time and ensuring adequate cash flow never stop, so these processes need to work efficiently and seamlessly.

Could it be easier for a client to pay you? Is your operating cash working while you’re asleep? If you haven’t considered the advantages of cash flow management tools, you’re about to uncover some gems. An expert business bank can assess your specific needs and implement these tools efficiently for you.

1. Make it easier for clients to pay you

Paying online isn’t just for shopping anymore. Make payment processing as easy as possible for clients with online payment options, such as electronic funds transfer or by accepting payments through your website. For instance, First Business Smart Pay Express, fully secure and mobile and tablet-friendly, allows your customers to make one-time or recurring payments on your custom-branded website.

Electronic funds transfer uses the Automated Clearing House (ACH) electronic payment network. Both of these options allow you to facilitate the conversion of receivables into cash and minimize float – the hold time it takes for a payment to clear after you receive it.

If your check really is in the mail, remote deposit capture allows you to get those paper funds into your operating account quickly, without leaving the office.

Benefit: Moving receivables into your account quickly can help improve your borrowing base, so you might be eligible for a more favorable line of credit, which can allow you to grow more quickly.

2. Hold on to your money longer

Staying ahead of payables is a given, but do you operate strategically? For example, if an invoice is due on the first of the month, rather than send a check on the 15th, paying via electronic funds transfer allows you to originate payment the day before the due date. That’s two more weeks each month to hold on to your money. For regular payments like rent, leases, or supplies, set up automated payments strategically so funds stay in your account as long as possible.

Benefit: Keeping more money in your account longer can turn into significant earnings credits, which can offset banking transaction fees and, in turn, create significant long-term cost savings.

3. Put your money to work

Did you know money can transfer, or “sweep,” from your operating account into another account each night automatically? Businesses and organizations often use this strategy if there’s a concern about balances exceeding the $250,000 FDIC-insurance threshold or by those simply seeking to maximize their rate of return.

Benefit: Your cash can move to an interest-bearing safety account that’s insured up to $25 million and your funds can transfer each night into a money market account to gain a higher rate of return.

4. Protect yourself from fraud

As you streamline payment methods, you can also strengthen your proactive fraud protection measures. For instance, you can submit a pre-approved list to your bank that specifies all the entities with permission to debit your account.

Benefit: If, for whatever reason, a debit hits your account from a source not on that list, the bank notifies you to approve or deny it. First Business ACH Positive Pay and Payee Positive Pay are two such solutions designed to thwart unauthorized electronic payments and check fraud.

Preventing debit card fraud also is an important concern for many business owners and managers. The latest smartphone apps allow you greater control over your business debit cards, including dictating how and where they’re used. One popular debit card fraud-prevention option is First Business SecurLOCK™ Equip, which allows you to set up user controls that manage how, when and where your debit card is used.

Benefit: This app allows you to customize your settings, for example, blocking any online debit card payments, restricting ATM use, setting spending categories and limits, and receiving real-time alerts.

Successful business owners continually search for competitive advantages — ways to work smarter, not harder. These cutting-edge cash flow management tools aren’t difficult to implement and can save you real time, money, and hassle in the long run.


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Kim Preston has over 30 years of financial services experience in treasury management, operations, client services, business development, and internal audit. She works with business and nonprofit leaders to help them run their finances efficiently.

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