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What types of Cash Management services are offered by banks?
Home » Accounting » Cash Management » What types of Cash Management services are offered by banks?The steps outlined above can help you improve the cash management of your business, but many businesses also use tools available through their banks. Different banks, of course, offer different types of services, but certain services are relatively common among all banks. A partial listing of some of those services appears below:
• Sweep accounts: Your bank will check your business accounts for excess cash near the close of the business day. If excess cash is available, it’s automatically moved into a money market fund until the next morning, so your surplus cash earns interest for you overnight.
• Automated Clearing House: The ACH transfers funds electronically between banks, and many businesses use this service in order to pay their employees through direct deposit. You can also use the service to automatically collect or pay debts, however, so you can forecast your payment and receipt dates with greater accuracy.
• Cash concentration: If you have stores in several geographic locations, those stores may use different local banks. However, if the primary bank of your business offers cash concentration services it can electronically pool the money from those various banks into a single account – you’ll often earn more interest as a result.
• Positive pay: Within this service your check register is automatically and electronically shared with your bank. Accordingly, your bank only pays those checks listed in the register, which increases cash availability through decreased check fraud.
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