Thin margins and cash flow issues are the bane of many small business owners. Add economic uncertainty into the mix, and it becomes even more of a struggle. In fact, uneven cash flow is a problem for 50% of small businesses in the U.S. and ranked third among their top concerns, according to a report published earlier this year by the Federal Reserve. Other top issues were inflation at 73% and covering their operating expenses at 54%. A survey by PYMTS in 2024 found that 45% of small business owners had gone without a paycheck because of cash flow issues.
With cash management services and other tools, you can handle your business deposits more efficiently, which saves you time and money by automating processes, reducing costs, improving liquidity, and giving you more secure payment methods. This all adds up to a more accurate cash flow picture for your business and makes it easier for you to forecast and manage your funds, to help you improve your bottom line.
Why Business Deposits Are Not the Same as Profitability
Every business owner likes to see cash flowing in, but they also have expenses to cover. Businesses that use an accrual-based accounting system and count transactions as they happen, but not when the payments are made, may have debts and income on the books that haven’t been realized.
There could be customers who are late in making payments and suppliers who don’t always deposit their checks on time. There could be a gap between what your ledger says and what’s actually in your bank accounts. Using a cash-based accounting method and recording when payments are actually made or received offers a more current idea of where you stand financially, but not where you’re heading.
Whichever method your business uses, you’ll also need to account for:
- Any investment in equipment, supplies, training, etc., that can take time before they’re realized as income or improve your profitability.
- Exchanges of goods and services with other businesses, vendors, and customers that you can account for in your books but won’t show up in your bank accounts.
- Business debts and payments would certainly affect your cash flow but have less of an impact on your bottom line when you deduct the interest as a business expense.
- Your operating expenses, such as taxes and insurance, affect your cash flow but certainly don’t improve your balance sheet.
How Improved Cash Management Helps Your Business
Cash flow management, also known as treasury management services, can help your business run more efficiently, improve your cash forecasting, and help you meet your financial obligations. These benefits include:
- Spend less time handling deposits and more time running your business.
- Reduce your cash handling costs with fewer trips to the bank and the need for specialized couriers.
- Improved security by reducing the chance of check fraud or theft.
- A more accurate financial picture and better cash flow forecasting, so you’ll have a better idea of when you can spend more on debt reduction or investing in your business and when you may need to scale back on expenses in case of a shortfall.
- Quicker access to your deposits, so you can make use of your funds as needed.
Banking Tools That Improve Your Bottom Line
Paper checks and mailing invoices are a thing of the past. With our Business Banking Solutions, you can make and receive payments and originate wire transfers directly from your workplace. This offers a faster and more efficient way of handling your payments and deposits because you can reduce the need to manually issue invoices and to make and receive payments. It’s also a more secure way of handling your transactions or reducing or eliminating the need for paper checks.
Automated Clearing House (ACH)
Make and receive payments electronically from your customers and to your vendors and employees. Our ACH Cash Management system is faster, more secure, and more affordable than paper checks. You can set up recurring payments for your recurring bills and receive payments more quickly. Not only is this more secure than paper checks, it’s also much faster than having to cut and mail checks or manually enter your payments. It’s also a more secure payment system, using encryption technology and digital payments rather than a paper check that can get lost or stolen in the mail.
Direct Deposit & Direct Debit
Set up automatic payments to your vendors and employees, and have your vendors set up automatic payments to your account. This saves your business time and money while improving the security of your payment methods.
Remote Deposit Capture (RDC)
Scan and deposit checks remotely, from your business, which saves you time and money by eliminating the need to visit a bank branch or an ATM. It reduces the chance of an error, gives you quicker access to your deposits, and improves the accuracy of your cash flow accounting because you can monitor your deposits in real time.
Merchant Processing
Merchant Processing: So, you can accept payments through credit cards, debit cards, as well as EBT, gift cards, and mobile wallets like Apple Pay™, Visa payWave®, and MasterPass™.
Learn More About Merchant Processing
Autobooks
An online banking and accounting platform that lets you send customer invoices and receive payments directly to your Business Checking Accounts, through our Online & Mobile Banking, with no need to transfer funds from an external payment system. You can create professional-looking invoices with your business logo, and we accept a wide range of payment options such as credit cards, debit cards, and ACH transfers. You can also automate tasks such as recurring invoices, set up automatic late fees for past due invoices, and report tasks such as automatically generated income and balance statements.
Contact Peoples Bank to Explore Our Business Banking Services
If you’d like to discover how to better manage your business deposits and payments and what our business banking services have to offer, please contact us or visit one of our locations in Iowa, Minnesota, and South Dakota to set up a consultation with one of our business bankers.