COVID-19 Cash Flow – 6 Banking and Treasury Strategies


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COVID-19 Cash Flow – 6 Banking and Treasury Strategies

As you look for creative cashflow strategies to get you through these uncertain times of COVID-19, consider reducing your banking fees and restructuring your treasury functions. Here are tips across six strategic areas that can help you conserve cash immediately, and in the days to come.

1. Consider these moves immediately 

  • Use a controlled disbursement account – These accounts provide early notification of clearing totals and precise daily funding totals so you can set your daily cash position. Do this ASAP!
  • Extend your lockbox cutoff times Ask the bank to extend your processing cut off times and prioritize your processing over other businesses. ASK NOW! If you don’t other businesses will and you’ll be left behind.
  • Implement automated electronic payments – Adding single-use automated credit payments allows you to extend AP payments to a maximum of 45 days while enabling you to earn cash rebates.
  • Pay no invoice before it is due. It happens all the time.
  • Consider a new credit card – Open a new credit card as an additional source of working capital

2. Manage your lockbox and float

  • Adjust float schedules (Lockbox, Remote Deposit and Deposit) – Make sure these services are providing maximum availability of funds. Ask to be on a Premiere Availability Schedule.
  • Verify weekend deposits – Verify that your lockbox processes deposits on the weekend.
  • Alternative payment processing – Determine how you would process payments if your lockbox was forced to close-down. Make sure your bank has a contingency plan.

3. Cash Deposits 

  • Automate the consolidation of your cash – If you use several banks, use an automated daily cash consolidation service to consolidate all cash into a main depository account.
  • Manage the receipt of mailed payments – Whether your checks get mailed to a corporate or local office, know how checks are handled and when they are deposited. If they are sitting on someone’s desk or in drawer, they are negatively impacting working capital.
  • Evaluate branch vs. cash vault deposits & courier safe services If employees make branch deposits, make sure the frequency ensures timely posting. If you are using a cash vault or armor courier service make sure deposits post quickly.
  • Consider an alternative bank – If your only bank is a small community bank you may want to consider an alternative bank resource in case of minimal staffing.

4. Merchant/credit card processing

  • Ensure next day availability of funds – Verify that merchant providers are providing next day availability of merchant funds – most do – but not all.
  • Maximize fund availability – Verify that merchant providers have you on the best cutoff time for fund availability.
  • Save 4% on transactions – ­Consider passing the merchant fee onto your customers, it’s typically 4%. This is becoming more common and it can be automated. We can assist!

5. Mid-term Considerations (2-4 weeks)

  • Negotiate fees across all accounts –Bank fees, foreign exchange fees, merchant fees and credit card rebates can be negotiated. This is our specialty. Aprio can help you negotiate a fee reduction – typically around 35%.
  • Move to quarterly rebates – Ask if credit card cash rebate programs can be paid quarterly, not annually.
  • For South Carolina-owned businesses – In South Carolina payments for sales, use tax, and payroll tax can be paid via credit card. This will extend those payables while earning a cash rebate.
  • Evaluate armored cash courier contracts – You may be able find an immediate and significant expense reduction. If the services are required, renegotiate the contracts.

6. Long-term (4-8 weeks.)

  • Add electronic check conversion to your merchant gateway – This is becoming more common and can save you money.
  • Add collection options –Add online receivables to help collection and simplify reconcilement.
  • Verify that your lockbox is in the right processing location –Ask your bank to conduct a Phoenix-Hecht postal study to evaluate the best location.  Most banks do this for free.

The bottom line

Optimizing your treasury functions and reducing fees across banking foreign exchange and merchant accounts can help you realize significant cash savings in these challenging times.

Let Aprio’s Treasury Optimization team negotiate lower fees and align your treasury functions for maximum efficiency. We typically save clients 35%. There are no upfront fees, we get paid on how much money we can save you.  We do all the work and you realize the savings.

To schedule a no-obligation assessment, contact Tim Saulnier, Director, Aprio Treasury Optimization Services.