How bank treasury management services can improve cash flow

In a challenging economic environment, improving cash flow becomes more critical than ever, with customers paying more slowly and suppliers tightening credit terms. Also, staffing may have been cut, leaving fewer people to accomplish the vital work of the organization and keep close watch on the financial picture.

“Treasury management services provide critical information and enhance efficiency, helping business owners and their employees manage cash in less time, without sacrificing quality,” says Jackie Hilder, a treasury management team leader with FirstMerit Bank.

Smart Business spoke with Hilder about treasury management services and how they can be used to improve cash flow and enhance overall business.

How are treasury management services used to improve cash flow for businesses?

Treasury management services are used by companies to collect and move funds more efficiently. Automated services can transfer funds between checking accounts and lines of credit to minimize interest expense and the time spent monitoring and moving cash. Online services provide immediate balance and transaction information so financial managers can make informed business decisions on the spot. Online banking can also include various types of electronic money movement, including wire transfers, direct deposit and account transfer.

A traditional treasury management service that many businesses benefit from is a lockbox. With this service, the bank provides a business with a P.O. Box address for their customers to send payments to. The bank picks up the mail and deposits the checks directly to the business’s account. Current lockbox services notify companies of the payment details, and provide check and invoice images via the Internet. A lockbox ensures a daily deposit without traveling to the bank and improves mail delivery time, making the collection process quick and easy.

By relieving the business of the clerical tasks involved with bank deposits, the company allows its employees to focus on business specific tasks, such as collections or sales.

How have new technologies enhanced treasury management services?

Remote deposit capture utilizes new technology and increases efficiency for many types of companies. This service allows a company to scan checks on a special scanner at their place of business and send images of the checks through the Internet for deposit. Besides avoiding trips to the bank, remote deposit usually provides more time for deposits to be completed than typical branch banking hours. Retention of the check images online can enhance customer service opportunities as well. There are various price points for high or low volume remote deposit, making it a great option for a variety of businesses. In some cases, information gathered as the checks are scanned is captured in a data file to integrate into the accounts receivable system.

Of course, technology has not completely eliminated human interaction, service or guidance. Bankers are still available to meet with clients to help them decide which services are best for their company and evaluate financing and investment options. Treasury services simply enhance the banking relationship and make the cash management process more efficient.