Leveraging Cash Management Automation | Flagship Bank (2024)

If "cash is king", then cash management should be treated like a queen.

And yet, cash management fails to be a top priority for some investors, small business owners, and entrepreneurs. We will be the first to admit that cash management is not always the most entertaining of tasks, but we refuse to let you to leave it on the back-burner.

Our proposed solution? Cash management automation.

We're diving into everything you need to know about cash management, why you should automate it, and what to look for in an automated cash management solution, so you can spend more time pursuing your other entrepreneurial and personal passions.

What is Cash Management?

Simply put, cash management is the process of collecting and managing cash flows. For businesses, cash management is a key component in determining an organization's financial health. It encompasses how a company manages its operations, financial investments, and financing activities.For individuals, it is essential in considering both financial stability and total wealth portfolio.

Why Cash Management is Key to Business Success

The way cash is managed can be the difference between business success and failure.

Proper cash management allows individuals and businesses to cover current expenses, plan for future payments, maintain cash balances, maintain adequate business stability, and expand the business. To summarize, cash management tells you how much cash to hold to meet immediate and long-term needs and wants. Improper cash management could result in being unable to meet everyday business needs and taking on debt.

Even if a company is making a profit by bringing in more revenue than it incurs in expenses, or completely blunders its earnings, managing cash flow is what truly determines your business's financial wellbeing.

"Never take your eyes off the cash flow because it's the lifeblood of business."

— Sir Richard Branson, founder of Virgin Group

Benefits of Cash Management Automation

There are a lot of factors that go into the collection, disbursem*nt, and reporting of cash flows. That's why streamlining the inflows and outflows through an automated cash management solution is in your best interest. That streamlined process has the added benefitsof:

Increased Business Efficiency

Manually processing transactions is a time-consuming process that can drive up labor costs and slump productivity. Therefore, leveraging cash management automation will eliminate time spent on monotony and free up time for increased customer service.

Improved Cash Flow

Automated solutions like currency recyclers can optimize your cash flow by reducing vault holdings and making sure you'll always have enough cash on hand. Check scanners are exactly as they sound. They create digital copies ready for immediate deposit into your bank account, meaning you will have access to your funds sooner and improved cash flow.

Cost Savings

If time is money, then you cannot afford the time lost till prepping, balancing, prepping bank deposits, scheduling outgoing payments, tracking investments, reporting on the movement of funds, and reviewing accounts receivable daily. Additionally, manual cash handling environments often pose risk of loss due to human error.

More Data

Cash management automation solutions all have tracking and reporting capabilities with both in-store and online transactions.

More data = more insight into your business performance and customer base.

More insight into your business performance and customer base = better targeted marketing initiatives.

Better targeted marketing initiatives = more sales.

You see where I'm going with this...

What to Look for in an Automated Cash Management System

When deciding to go digital with your cash management, there are a few key elements to look for in an automated system to make the investment worthwhile.

Easy-to-Use Software

Find a software that makes managing your finances easier, not harder. One that is user-friendly, mobile-friendly, and able to integrate with your current accounting software is the goal. Having a dashboard that allows visibility into transaction history and current transactions shows you where money needs to be moved around — where is there excess cash and where is there cash needed?

Electronic Deposits

We live in the age of digital banking — and we could not be more grateful. Gone are the days of cramming a bank drive thru run during your lunch hour or going the weekend without being able to deposit a check. Scanning checks to deposit directly into your business bank account ensures you have access to cash whenever and wherever you need it. And therefore also ensuring relationships with your vendors stay positive since you are able to pay their invoices if not sooner, then on time.

Fraud Detection

When looking into cash management automation options, it is never a bad idea to inquire about the safety and security of the services provided. We live, play, and work in both a cyber-secure and cyber-fluid world, so you want to ensure your business, your employees, your clients, and your vendors are protected. Fraud detection functions that could come with your automation software include requiring a payment approver to use a passcode or putting stop payments on suspicious transactions.

Variety of Payment Options

The ability to pay bills and schedule payments through different methods — ACH, wire, check, cryptocurrency, etc. etc. — simplifies your financing process immensely. Especially on those minor inconvenience days when a vendor needs a same-day payment or your accounts payable guru is on vacation.

Personalized Assistance

Your automated cash management system should provide quick, quality assistance to any questions or service issues. Because, alas, when technology fails or you need further clarification, you need the tools and a backup resource to be able to keep your business operations running smoothly.

Luckily for Flagship Bank customers, this is something we pride ourselves on.

As bankers, we specialize in everything that comes along with cash management.So, if you are finding your current cash management automation systems lacking, give us a call.