Managing Cash

Good cash management tools and practices can help a firm cut costs, speed invoice collection, pay bills on time, streamline overseas operations, pay down debt, increase investment income, and prevent fraud. They can “keep more money working for you over time,” says Michael Bilski, executive vice president at the North American Banking Company in Roseville.

The results can be dramatic, say area bankers. “We customized a couple of things for a new customer in ways that allow them do in 15 minutes what it used to take one person a whole day,” says Crystal Hatcher, senior vice president for Bloomington-based Venture Bank.

Minnesota banks both large and small offer cash-management services that fit commercial clients’ needs. Although bankers say they’re eager to craft a custom setup for any client that needs one, most also offer off-the-rack products that can help businesses track their finances and make the most of their money.

Checking Account Extras:

Many banks offer checking account analysis that shows where and when a business spent money. And although federal laws prohibit banks from paying interest on commercial checking accounts, some banks offer an earnings credit on checking account balances. Edina-based Fidelity Bank, for instance, offers an earnings credit that, as of this writing, is at .25 percent.

If your firm writes a lot of checks, consider finding a bank-based check service. Many banks will write and mail client checks, passing along their cost efficiencies—as well as their bulk mailing rates.

Sweep Services:

Think you can do better than the earnings credit rate? A sweep service clears out any money in your checking account at the end of each business day, depositing it into a savings, money market, or other investment account, or creating a payment against a line of credit. “For many of our clients, the best investment they can make is to drive down the loan balance,” says Chuck Mueller, Fidelity’s president and CEO. If you prefer an investment account, remember that an account holder can make automated or pre-authorized transfers from a savings account to a checking account only six times a month.