Treasury services provided by banks can allow businesses large and small to grow without the cost of adding labor. And those services can lead to higher profitability long term and introduce efficiencies of scale, allowing companies to redirect some of their personnel to higher value, more profitable activities, says Debbie Innes, executive vice president, retail banking and treasury management, at Cadence Bank.
“Everything done in treasury services is built around the cash flow cycle, so the products are targeted at bringing greater improvements to that process,” says Innes. “It not only makes it more convenient for employees in a purchase environment, but it’s more economical for the business on the outflow and the information reporting sides.”
Smart Business spoke with Innes about advancements in treasury management services, the associated technologies and how that translates to greater efficiencies and profitability for your business.
What are some of the latest advances in banking technologies?
One of the greatest technologies that treasury management services has been able to bring to businesses is remote depositing, which allows customers to deposit from their desktops, saving a trip to the bank. Desktop scanners, printers and other TWAIN-compatible devices allow businesses to make deposits without investing in special equipment. And now there’s the onset of mobile payments.
The use of text alerts is also increasing. Businesses can set preferences that, for example, alert them of a payment deposit received by their bank. Business owners can use text messaging to access almost limitless amounts of data regarding receipts, which is so critical for shipping orders or releasing products.
Because of technology improvements to lock boxes, banks can offer much faster throughput, shortening reporting times so clients know earlier when payments are received. Equipment is less expensive now, so the cost has come down. And the associated optical and image character recognition has been perfected, significantly improving the quality and clarity of the images.
Storage has also become less expensive, so banks are able to retain information longer. Three years ago, if a client wanted to store statements for seven years and provide access to those online, it would be very expensive to the bank and to the client. Today, bandwidth is much greater, which means prices for that service are value added and not a deterrent.
On the merchant services front, one of the most recent advances is multifaceted terminals. Businesses no longer need multiple pieces of equipment to accept credit cards, checks and cash, so they don’t need dedicated counter space or to make additional investments. Mobile also has entered merchant services. Instead of traveling with hardware to trade shows, for example, businesses can take payments with mobile devices.
What new services are available to businesses?
There is a new service called a payables lock box. A company’s bills are mailed to the bank, which scans and indexes the images. Through the Internet, the bank then provides the client the ability to see details of the bills and routes them to the appropriate business unit for payment approval, which the bank will do for you.
Also, companies often have multiple login IDs and passwords to get balances, conduct transactions, make payments, access merchant services and view credit card statements. Now there is a service, pioneered by Cadence Bank, that utilizes a single sign-on portal, allowing you to log into the bank and access every service you subscribe to using just one login ID, password and security authentication method.
How can treasury management help a business keep its cash secure?
Instead of having someone issue invoices and receive checks, a lock box outsources some functions to the bank so the issuer of the invoice is not the receiver of payment, minimizing the opportunity for theft. Banks offer malware software to buffer between the banking application and your hard drive, which can detect a Trojan virus and allow the bank to stop the online banking application. The bank then notifies the customer to take action. Because most cyber attacks are focused on payments, banks provide business customers with hard tokens for protection. Some customers don’t like carrying the hard token device with them when traveling, so now, by using a mobile device, the client can generate the number to key in through text messaging.
How can a business measure the return on investment associated with treasury services?
Typically, companies can realize savings though staff reductions and redeployment of personnel to higher-value work responsibilities, such as collecting overdue receivables. Going from paper payments to plastic also can offer savings on materials. And when a company switches to a card, routing becomes automated, reducing the time it takes for the transaction. Some companies will allow payments with later terms if a customer pays electronically because they have much less risk.
Treasury management products automate data integration, which makes collecting, reconciling and posting receivables faster. Also, the amount of data provided allows a company to examine its inflow and outflow and more efficiently invest unencumbered funds.
How can businesses work with banks to drive better relationships?
Banks want customers driving their development efforts. They don’t want to invest in products clients don’t want, so it’s important for banks to understand clients’ business. Through that discovery, banks can better pair their technologies, process and services to their clients’ needs. Banks can build solutions because they have programming resources, information technology and strategists. If they understand a business’ situation, they can offer creative ideas to resolve their issues.
Debbie Innes is executive vice president, retail banking and treasury management, at Cadence Bank. Reach her at (713) 871-3915 or [email protected]
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