Cash management is an important term which is quite broad and covers quite a lot of functions that are helpful to business process and individual receipts as well as payments which happen in a manner that is more efficient and organized. The cash asset administering these days will often make use of various support services that are completely automated. These services are offered by almost every bank and many other institutions that deal with finances. The cash management range of services may vary from simple things such as a cheque book balancing when you need to invest some cash into bonds as well as many different security types to software that is completely automated and allowing for cash collection with a simple button click. |
When we are talking about cash collections, we cannot miss to mention the most popular options that are available nowadays. These options make the payments’ reception process from customers a lot easier and they are surely a sign of the future being here. Clearing houses that are automated will make cash transactions between businesses possible. These transactions will deduct the amount of the payment from the account of the customer and will deposit these funds in the account of the vendor. This is a service which is offered to you by the local banks, but for a fee.
Other useful services that fall into the cash management category are the lockbox services. These are used by many businesses in order to speed up the process of the account receivables. Lockbox cash management requires the client to have an established post office box. That way the vendor is going to use the post office address of the client and post it as a remittance address for the invoices. Once the payments are received, they will be collected by the financial institution and posted by it to the account of the customer. Usually this process can be monitored thoroughly as the customer is able to get access to reports on a daily basis. These reports can be used for payment posting into the receivables of the company. Due to the increased amount of cases with cheque fraud, the account reconcilement services concept (ARS) is now a must for a great number of companies. Generally, ARC keeps the cheque book of accounts that are operational balanced all the time. There is a bonus level of protection which is expressed by an allowance of the client to have a daily listing of their checks uploaded. That way all the checks that were issued on the client’s account are going to be registered and in case there is a presented check which isn’t on this list with authorized checks, it will be rejected by the bank.
If it’s about investing some cash, a lot of banks offer the great ability to transfer some of your funds into other investments such as mutual funds. The automated debt will provide the client with the ability to increase the corporate investment portfolio’s value without spending great lots of time to work on investment strategies that are complicated.
If you want to learn more about the very basics of cash management follow this link. Also, you can read more about SEPA direct debit and how it works click here
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