How Treasury Management Strategies Can Improve Your Cash Flow

March 18, 2022

“Liquidity is oxygen for a financial system,” according to noted financial leader Ruth Porat . Whether you are the CFO of Alphabet and Google, like Porat, or the owner-operator of a small business in Phoenix, taking a balanced approach to liquidity can help your business stay resilient and flexible through any economic climate. 

To help you enhance cash flow, an engaged relationship banker should proactively work with you to tailor your treasury management plan for maximum efficiency in receivables, payables and information reporting. Your bank should offer sophisticated digital solutions to simplify these processes so that your team can conduct business anywhere, any time, on any device. 

1. Managing receivables 

Just as we want oxygen to flow freely for optimum physical performance, businesses need funds to flow so that you can put your money to work when you need it. An appropriate treasury management strategy can help your business rapidly deposit the funds it receives. For instance, remote deposit capture — an option that the FDIC reports has become more commonplace in recent years  — can expedite fund collection by electronically scanning checks and depositing them into your bank account. 

Depending on your business needs, you also may benefit from mobile deposit, ACH debit origination or flexible point-of-sale merchant service solutions — all designed to save time and money in your AR process.  

2. Managing accounts payable 

Like oxygen in the body, as cash flows into your business, it also flows out in the form of accounts payable. It’s increasingly complex to manage various methods of vendor payments, from credit card to ACH and check to Applications Programming Interface (API) such as QuickBooks Payments. To manage resources efficiently, business owners are opting for digital solutions that automate the AP process. 

Your banker might recommend a customized solution that includes:  

    • Same-day ACH payment origination to control cash flow while sending time-sensitive transactions securely.
    • Commercial credit cards  that can increase flexibility with automated payments, simplify invoice reporting and effectively offer a “float” of 25-30 days. 
    • Integrated payables to consolidate payment instructions from multiple channels to create one automated procedure. 

3. Monitoring information and liquidity 

The latest digital solutions make cash management simpler and more fluid, able to be conducted any time, from anywhere — and on any device. Paperless and mobile banking, with convenient, integrated reporting features, have become the standard. 
In many industries, products that use API technology are also becoming the norm. APIs enable systems to communicate to create real-time, seamless experiences. For example, API technology powers apps that track a package’s delivery minute by minute and stop by stop. Business products that use API infrastructure can “talk” with your accounting system so that you know your current balance and transaction status at all times — a bit like a pulse oximeter for your financials. 

4. Blockchain technology for payables and receivables 

For companies that make or accept B2B payments, one of the most exciting new developments is blockchain-based digital payments solutions. Our bank is now among the first to offer business clients a blockchain platform to make and receive real-time, regulatory-compliant digital payments. You may wish to find out if your bank has plans to offer a blockchain-based payments capability that adds 24/7/365 convenience, not to mention heightened security, to the mix.

5. Help from your relationship manager

If liquidity is oxygen, your business banker can be the specialist who helps monitor the health of your business. Our trusted advisors are constantly refining our lineup of treasury management solutions to provide a robust digital payments ecosystem for our clients. Contact your Alliance Bank of Arizona relationship manager to learn more about what our bank can offer businesses like yours.