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What is Cash Management and How Can It Help My Business

Using cash management services can make your business cash flow management simpler and more efficient, giving you greater control over your finances.

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Managing your business finances and payment processes can seem like a daunting task when you’re already trying to run a successful business.
Using cash management services like ACH payments, mobile banking, and online bill pay can make your business cash flow management simpler and more efficient, giving you greater control over your finances.

What is Cash Management?

Cash management is the day-to-day administrative tasks that support the inflow and outflow of your business. Any financial activities associated with your company fall under cash management, which you may also see referred to as treasury management.

However, it’s important to understand that treasury management is a much larger operation and includes funding and investment opportunities your business may have. When discussing your business cash management, this terminology is best to use and typically incorporates merchant processing services, credit options, and any financial management you’re doing day-to-day.

What’s Included with Cash Management Services

When working on anything related to your cash management or signing up for new services, this is more than a cash management account only. While this will be included under the “cash management” umbrella, these services also include:
  • Remote deposits—scan your checks from a computer or smartphone to remotely deposit them into your business checking account.
  • Merchant services—upgrade your point-of-sale system to accept card payments and offer your customers the option of joining your loyalty program or buying gift cards to use later at your place of business.
  • ACH services—make quick and safe electronic payments from any US-based bank using ACH, or Automatic Clearing House, to lower costs and improve cash flow.
  • Wire transfers—transfer money to anywhere in the world using domestic or international wire transfers.
  • Sweep accounts —set up automatic transfers for amounts exceeding a chosen limit and invest those funds into a high interest investment account at the end of every business day.
  • Fraud management tools—feel safe in the knowledge that First National Bank and Trust Company are here to protect your money. Our blocks and filters prevent unauthorized users from accessing your business accounts, while real time alerts can inform you of suspicious activity before any of your finances are compromised.
  • Zero balance accounts—for companies maintaining separate accounts for operations, payroll, and more, a zero-balance account concentrates your finances in one account. Payments are made from subsidiary accounts when necessary, maintaining a zero balance the remainder of the time.
  • EDI reporting—reduce paperwork and processing times for ACH payments with electronic data interchange (EDI) data.
  • Commercial vault services—with a commercial vault, you can bulk cash or coins, along with other deposits, in a secure location. First National Bank and Trust Company can arrange secure transportation of your deposits, reducing your trips to the bank and improving security.
  • Lockbox services—streamline payments and cash flow with a bank lockbox, giving customers a designated area to send payments that can be immediately deposited into your account.
  • Online bill pay—with online bill payment services, you can access your business’s finances 24/7 and pay vendors directly from your online or mobile banking app.
  •  Mobile banking—check your account balances from anywhere and review transfers, make payments, and deposit checks all through mobile banking.

How Can Cash Management Services Help Your Business Grow

One of the biggest benefits of cash management services is that they can help you oversee your small business cash flow more easily. There are fewer accounts for you to manage and you get a better picture of where your money is coming from and going to. 

This can be one of the most effective ways to maximize your earnings, particularly as many cash management accounts offer a higher interest rate than standard savings accounts. When you maintain a cash balance while maximizing your earnings, you minimize the risk of running out of cash in your business.

Cash management services can also help you evaluate your need for business loans and lending services more easily. You’ll have a full picture of the current state of your business finances, meaning you can determine your lending needs accurately and quickly.

By integrating your cash management services into a single online banking system, you and your business administrators all have access to the business funds to keep operations running smoothly.

Additionally, merchant services like POS system upgrades give your customers a range of ways to pay for their products or services. Whether you’re accepting ACH payments, credit cards and debit cards, or even digital payments and mobile wallets, giving your customers a choice to pay how they want can increase sales and overall income for your business.

What is a Cash Management Account?

A cash management account is a specific type of financial account that’s typically considered an alternative to a traditional business account with a bank. They have similar features to savings, checking, and even investment accounts, but are held under a single product so you have fewer accounts you need to manage.

Cash management accounts are FDIC insured up to $1 million, or more in some cases. They often have higher interest rates for customers and little to no fees for opening or maintaining an account.

These types of accounts are generally offered by online institutions only. While you get the convenience of managing fewer accounts, you may lose out on many of the customer service features of a traditional bank account.

When it comes to running your business, you may want to consider having a neighborhood banker on hand for questions and a great familiarity with your local market and your business specifically. 

A common misconception is that you need a cash management account to get cash management services from a local bank. This isn’t the case. 

You can easily integrate many cash management services into your existing business checking or savings products, directly from your local bank. You may even benefit from better interest rates by opening various accounts within the same institution.

Not every business will have the same banking needs, so it’s best to look for a bank that offers a variety of business checking and business savings accounts, rather than a single cash management account option. 

At First National Bank and Trust Company, we have a range of commercial products that our team can talk you through to find the right option for your business. We even have the option to offer a health savings account to your employees—something a cash management account wouldn’t have.

See if Cash Management is Right for Your Business

As a part of your local community, FNBT is here to help both businesses and individuals achieve their financial goals. We make it as simple as possible to support you when you need us, in the way that works best for you. When you thrive, our whole community does too.

If you have questions about starting or growing your business, or how to better manage your business finances, contact our team or stop by a branch to talk to our commercial experts about cash management services we can help with. Visit us in Beloit, Argyle, Clinton, Delavan, Darien, Elkhorn, Janesville, Monroe, Walworth, or Williams Bay, WI, or Rockton, Roscoe, and Winnebago, IL.