Make Banking Part of Your Business Strategy

by Nate Bibens


Business-StrategyOptimism is on the rise among business owners and, as the economic recovery continues, businesses are ready to grow by expanding operations, hiring new talent and purchasing new equipment. They are also searching for new strategies, financing options and ideas for better market penetration.

As part of a growth plan, one of the best advantages a business can have is its banker. An experienced banking partner should understand every aspect of your business and offer solutions that allow you to expand operations, create efficiencies and generate more revenue.

How Does Your Cash Flow?

Most business owners talk about the importance of cash flow, but not many go deep into the process and determine how to make it better. Businesses need to ask questions such as: How many days does it take to collect on receivables? How long are you paying on collectables? Are you getting discounts for paying early?

Many companies operate inefficiently, whether by duplicating internal processes or taking unnecessary extra steps to receive money. It costs $2 to $5 to mail a check, whereas sending an Automated Clearing House (ACH) payment costs less than $1. Businesses need to review how much time it takes to print, stuff and mail a check versus using a card or ACH payment.

By working closely with a banker, businesses can gain cash flow relief and create better operational efficiencies. Bankers can also help business owners create a profitable and logical cash flow system.

Risk Management and Efficiency

Anything businesses can do to manage risk can benefit their bottom line. This includes having dual controls with employees, performing regular inventory checks, having different people sign off on checks, and creating a manageable process to detect and deter internal and external fraud. Frequently, risk factors can be mitigated simply by paying attention to everyday details.

Risk efficiency is something you should also consider discussing with your banker as it relates to items such as outsourcing payroll or return collections. Often, businesses can outsource certain functions to save time and money. For companies with large receivables, it may be more efficient to have a lockbox or outsourced collection system.

Creating Operational Efficiencies

By understanding cash and business cycles, bankers can help a business create operational efficiencies in several areas, including payments, cash flow cycles, commercial cards and reconciliation.

Purchasing cards are one item to consider from a processing standpoint. Selecting the right program can reduce check writing and provide increased flexibility in cash flow. Additionally, it creates a more streamlined tracking system for accounting departments. By allowing job numbers to be attached to specific expenses, companies can easily allocate costs to the appropriate projects, which results in more effective planning and budgeting.

By working closely with an experienced banker, businesses have the opportunity to create efficiencies that can lead to an improved bottom line and a positive outlook for future growth.

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