Bank Of Utah
Business Cash Management Services: Luxury or Necessity?
January 2013, by Ashley Massey
It’s Friday morning. Brad, your controller, gets his morning beverage, rolls up to his desk, opens his laptop and starts payroll… and the mail comes. In the pile are client checks you’ve been waiting for (for weeks), and you’d like to get them in the bank now so you can pay rent. So you send Brad to the bank to deposit checks and to the post office to mail the rent check. He waits in line at the bank, then at the post office, then files into a convenient store for another beverage—he’ll need it to power through payroll—and he waits in line again.
Returning to the office at least an hour later, Brad restarts payroll. Employees, eager to get their paychecks before the banks close, start popping into Brad’s office: those checks ready yet? Got plans for the weekend? How’s Betsy? Around 4pm, Brad finally wraps up payroll and begins digging for financial records, which are due to the accountant on Monday for tax filing. He’s disappointed about having to stay late on a Friday night. His only consolation: overtime pay.
If this was your business, I’d ask, why haven’t you automated your cash management yet? And your response would likely be this: it costs too much.
Cash management, or treasury management, services, are not cost-efficient for every business; however, they are for most businesses, and certainly would be for the business in the scenario above. By switching to remote check deposit, automatic rent payments, and paperless payroll and record-keeping, Brad could have stayed in the office and had enough time to get his mission-critical tasks done.
As for the cost, cash management products often cost less than expected, especially if your financial institution offers an “a la carte” option where you pay only for the products you need. A small dentist’s office that accepts a high volume of checks could sign up for a single product like remote deposit, which would cut out bank trips and get money in the account faster. The owner of a storage unit company, instead of waiting for checks to arrive, could use ACH debit to auto-debit customers’ checking accounts or credit cards on the first of every month. In some cases, you might only pay per transaction, further ensuring that you only pay for what you need.
Could you benefit from one or more cash management products? Here are a few areas to consider:
  • Do you have bills that are due regularly, such as rental payments, vendor payments or annual dues?
  • Do you take checks in instances where you could be using credit cards or automatic payments?
  • Would receiving instant payments help you bridge cash flow gaps?
  • Are you located far away from a bank branch, or is your business open past 5pm?
  • Do you have large deposits you might not want to send with a runner?
  • Do you write a lot of checks and worry about check fraud?
  • Do you have residual funds and/or a line of credit?
  • Could you benefit from sending wires online?
If you answered yes to any of these, it’s worth getting pricing information from a few financial institutions and doing a cost-benefit analysis. When doing so, consider the cost of employee time—would having the ability to handle payments electronically and keep employees in-house save money? You might pay $25 per month for remote deposit, versus $25 a week to send an employee to the bank. Consider also any savings from reducing the use of laser-printing, paper and postage,; or savings from using an automatic account sweep to pay down a line of credit faster or move money into an interest-earning account sooner. Finally, look at security: could you prevent fraud with tighter monitoring of account and check activity?
For most business owners, automated and digitized services become an essential part of cash handling. Bottom line: if you could increase employee productivity, streamline cash flow, provide convenience to customers, or automate payments, what is that worth to you?
About the Author
Ashley Massey is a treasury management relationship manager with Bank of Utah, Utah’s community bank since 1952. As part of its six-person, local treasury management team, Ashley provides one-on-one support to Utah business owners who want a banking relationship that’s more than an 800-number. Having an in-house team means that the Bank of Utah officer assigned to an account can meet with a business owner, get to know the business, make educated recommendations, and train employees on how to use cash management products. To learn more about Bank of Utah's Treasury Management Solutions, contact us for a consultation at 801-924-3636 or