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Financial Fitness: Business Cash Management Tools for the 21st Century

From the most seasoned veteran to those just starting out in a new venture, one thing all business owners must know is that keeping a good cash flow is essential for continuing success. Maintaining a vigilant eye on your cash-at-hand, payables and receivables may sound academic, but when projects are flowing and customers are calling and priorities are being juggled, it’s often bookkeeping and banking that get pushed back until a less hectic time. The problem with that should be obvious. When your business income arrives primarily in the form of customer checks, delaying deposits for any length of time can lead to serious cash flow consequences. And putting off paying your suppliers and other creditors can cause delays or problems when looking to make additional purchases to handle new jobs.
 
It used to be that when customers paid with a check, you filled out a deposit slip and walked or drove the check to your local bank, and after depositing the check amount would clear in a few days. When a bill came in from a supplier, a check was drafted and mailed back in payment, again taking a few days (plus however long it took your supplier to get to the bank and make their own deposit) to clear your bank account. Putting off these accounting tasks is easy to do; they take time and that is often a luxury business owners do not have.
 
The evolution of electronic banking, plus increased internet security, have recently provided some solutions to help business owners avoid getting caught "between deposits”. Luckily, it is now possible to cut down considerably the amount of time it takes to manage payables and receivables,cut out the trips to the bank, and keep in good standing with suppliers and customers without having to leave your desk. Here is a sampling of a few of the tools your bank may offer to business customers.
 
Payables Made Easy
 
Automated bill pay is a great tool for business as well as personal finances. Many banks provide their business customers with the capability to set up a list of vendors and schedule one-time or recurring payments. The bank handles the cash dispersal according to the schedule you create in advance, and all payments can be scheduled through your on-line banking service without leaving the office.
 
ACH (Automated Clearing House) Direct Credits are another tool your financial institution may offer that can really save time. It is used quite often for payroll, when employee salaries are deposited directly into their bank account rather than being distributed as paper checks. But it can also be used to make payments directly into vendor accounts, saving time with the payables process.
 
Receivables Made Easy
 
ACH (Automated Clearing House) Direct Credits can work to collect money owed to you just as easily as they work to pay money to creditors. They are especially handy to set up for recurring fees such as monthly payments or dues.
 
Merchant Processing Services available from your bank make it convenient to accept credit card payments from your customers. With credit card payments, as long as the payment is approved there is no danger of bounced checks and the cash will be deposited into your business account without a trip to the bank.
 
Remote Deposit Capture makes it possible to accept checks from your customers and deposit them into your bank account from your desk. Checks are scanned and transmitted to your bank via the internet. In most cases, the funds will be credited to your account quite quickly; many banks promise next-morning credit as long as your scan is received before their daily deadline.
 
Online banking in general helps business owners keep track of their cash from the convenience of their own office. With these additional electronic tools to help manage payables and receivables, valuable time is recovered by the business owner to use making and spending more money. If you’re not already utilizing these great banking services, contact your bank to get started now!
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