Carefully Designed Account Structure Can Protect and Enhance Cash Flow

Cash flow is the lifeblood of any company. Any disruption in that flow – whether because of fraud, unexpected significant expense or timing of receivables – can cause major headaches.

Fortunately, there are ways to arrange your business’s account structure so you can sleep better at night, knowing your company’s cash flow is protected and returns on deposits are optimized.

Here are a few examples of the ways account structure can both protect and enhance cash flow:

Cash Flow Protection

• Setting up a deposit-only, zero-balance account with blocks prohibiting any debits protects your receivables. You can share this account number freely with payees knowing it’s protected from fraudulent withdrawals. This account feeds your main operating account. For some businesses that may also have a term loan, this account may be set up as a collateral reserve account to offer additional benefits for bank and borrower.
• The main operating account receives funding from the deposit-only account and serves as the main source for payables. Services to protect funds in this account from fraud include ACH filters, which help prevent unauthorized ACH transactions, and payee positive pay, which instructs the bank on who you’re paying and how much, then reconciles the checks presented against that list.
• A revolving line of credit connected to the main operating account with a two-way connection:
  • To sweep funds into your main operating account as needed to cover payables
  • To automatically pay down the balance on the line of credit and minimize interest expense

Cash Flow Enhancement

• A money market account can optimize returns on cash that isn’t needed for immediate use. The deposits are segmented away from operating funds, generating interest without any principal risk and maintaining access to liquidity.
• Remote deposit can facilitate faster funding using a compact check scanner and a secure website connection, saving time and reducing risk for businesses that receive a lot of check payments. (Pinnacle just added two additional pickup windows each business day to provide a total of three processing cutoffs for our clients.)
• Merchant services allow anytime/anyplace transactions for businesses that take debit and credit card payments. (Pinnacle is one of the few banks that still has in-house merchant services.)
• Treasury solutions like Bank Administration Institute (BAI) reconciliation help streamline the reconciliation process, creating efficiency for management teams. An integrated receivables service automatically matches invoices with payments received through any channel, providing insight to unpaid items.
• Purchasing cards serve as working capital, offering a settlement date up to 25 days after the credit card cycle ends. A card program can optimize cash flow, improve purchasing convenience, control and track travel and expenses and minimize fraud. Businesses may also benefit from card rewards.

These are just a few examples of using your deposit account structure and treasury services to pave the way for steady, protected cash flow, while also achieving optimal returns on your deposits. A trusted financial advisor can help you set up a customized structure and services to enhance your company’s cash flow and protect the funds your team works so hard to earn.