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CASH IS KING
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TODAY'S
BANKS OFFER PROGRAMS AND SERVICES TO HELP MANAGE CASH AT THE SPEED
OF BUSINESS.
BY C.B. ADAMS
Gone are the days when a business owner could wait until the monthly
bank statement arrived in order to reconcile the account. Gone,
too, are the days when the occasional trip to see the bank teller
was enough to keep abreast of that account. Today, business owners,
accountants, CFOs and other money handlers feel the need for speed.
From the one-person shop to the small business to the larger corporations,
they all want immediate access to all their accounts and the ability
to implement programs and services that help them manage their cash,
investments and loans in real time 24-hours-a-day, seven-days a-week.
And that is exactly what area banks are offering, thanks in large
part, to the Internet.
“Every time technology takes a leap forward, so does cash management.
The Internet has changed the way businesses manage their cash and
makes it easier,” says Marty Ganz, senior vice president at First
Bank. “Not many small businesses realize how easy and inexpensive
that can be and what a savings it can provide for them. Large corporations
do a pretty good job with that, but the small business owner probably
isn’t doing as much as he should in this area.”
Paul Millard, vice president of credit underwriting at TheBANK of
Edwardsville concurs. He says providing cash management services
to medium and small businesses is a growing market with significant
growth potential.
“Internet access to all a business’ accounts and being able to manage
those accounts in real time is becoming almost standard for a lot
of new businesses. Being able to move their money, make the money
work for them as best as it can is a key for them, especially when
the margins are getting tighter and tighter,” Millard says.
SUCCESS STORY 1
One of the benefits of cash management services is the ability to
adapt and scale them to the needs of an individual business, according
to Ganz. She tells the story of a current client who has 14 locations
throughout the Midwest. Before coming to First Bank, the client
had bank accounts at 14 different banks and a business loan. Ganz
consolidated all his accounts into one, implemented an ACH program
and set up a “loan sweep.” The loan sweep allowed the client to
pay down his loan on a daily basis and keep the interest at a minimum.
“We estimated he would save some $60,000 a year in interest expense.
In actuality, at the end of the first year, he called me and said,
‘This is just so marvelous. I saved $84,000 last year.’ To a business
owner, that is a lot of money,” Ganz says.
SUITES OF SERVICES
Businesses of all sizes are becoming more sophisticated, not only
in their operations, but also in their cash management needs. Though
sometimes such businesses do not know how to access cash management
services.
“Some businesses think they can go out and buy a simple software
accounting package and be able to manage their business financially
from that standpoint. Those packages are good, but a business still
needs the advice and expertise offered by a bank’s cash management
services,” Millard says.
Depending on their needs, banks now offer a wide range of management
solutions, including:
- Payroll
transactions
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ACH (automated clearinghouse)
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Balance and transaction reporting
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Tax payments
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Transfer funds
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Wire transfers
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Control of access rights
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“We are able
to offer a whole suite of treasury management (or cash management)
services to any size business, including those that may not have
considered them before,” says Kelley Schwartz, vice president, treasury
management sales at Southwest Bank. “In tough economic times, it
is going to be even more important to have a handle on your cash,
keep your interest expense down, and use your funds to the fullest
extent. Treasury management services and controls allow you to do
this either in an automated fashion or to allow you to monitor the
funds and then make the appropriate movement of funds.”
SUCCESS STORY II
Schwartz recounts a recent success story. When a client came to
her at Southwest Bank, she recognized that the company accounts
were unnecessarily complicated. She restructured accounts, including
savings, and implemented a new, customized suite of treasury management
services, including positive pay and CD-ROM imaging. These changes
resulted in both savings of 40 to 50 percent in monthly bank service
charges, as well as the use of the new services.
“Treasury management services are available to all sizes of companies.
These services offer cost savings, because they help reduce interest
expense or because they enhance your income because you are not
letting it sit idly in an account. But the services go beyond cost
savings. They also offer employee benefits, like direct deposit,
fraud control and faster collections. There is also the benefit
that comes from better knowledge about your cash management and
all the potential things you can do with your funds,” Schwartz says.
C.B. Adams is a St. Louis-based writer and an adjunct communications
professor at UM–St. Louis and St. Charles Community College.
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