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Find out what cash management is and what it can do for your business

Using cash management services allows you to save time and resources while focusing on the heart of your business.

6 min. read

Running a business requires a lot of time and managing moving parts and changing priorities. But the primary thing that keeps it going? Cash flow, or the funds that come in and out of your business. 

It’s a delicate balance to manage business income and expenses so that things are running smoothly, and you don’t find yourself in a cash crunch or with excess cash that’s not being used wisely. That’s where cash management services come in and can support your business. 

What is cash management?

Cash management is an umbrella term that can refer to various activities and is sometimes called treasury management. In the context of your business, it’s about keeping a close eye on your cash flow. 

This means reviewing your cash inflows and outflows and making sure your business is set up for success to handle your daily operations. Through this process, you can make sure the money running through your business is going where you want at just the right time. 

Your cash positions will highlight:

  • How stable your business is
  • The ability to invest in your company
  • Pay expenses in a timely manner
  • Invest to grow your business
  • Your liquidity 

If your cash flow isn’t well-managed, it can sink your business. Oftentimes, this may be a neglected aspect for smaller businesses, but cash management services can help. 

“If your cash flow isn’t well-managed, it can sink your business.”

What are cash management services?

Cash management services refer to various types of tools and resources that can help you manage the cash flow of your business. Through these services, you can streamline how you pay and get paid. Cash management services may be used as part of business banking and help you simplify how money goes in and out of your business.

Some cash management services include:

  • Payroll processing: Making sure your employees are paid is a time-intensive, yet integral task for any business. Utilizing payroll processing services, you can free up time and resources. At BMO, we offer business owners special discounts for Paychex® to help process payroll and facilitate HR services. For small business cash management, you can use Business Online Payroll® and pay one set fee for unlimited payroll for up to 10 employees. 
  • Merchant services: Having an easy way for customers to pay for your products or services can help you get paid faster. BMO offers merchant services through Worldpay from FIS®, which allows you to easily accept card payments in various ways. For example, through your mobile phone, your website, or wireless or virtual terminals. The best part? You can get funds the next day if you deposit them into your BMO business checking account, so you can access your capital even faster.
  • Remote deposit: Skip the trip to the bank and deposit paper checks through remote deposit. Deposits are processed same day up to 8pm CT, giving you flexibility and boosting your cash flow.
  • Zelle® for business: Make payments a breeze and hassle-free with Zelle® for business, allowing you to quickly send, receive, and track payments. You can get started with just your email or phone number, using BMO Digital Banking.
  • BMO Bill Connect: Reduce potential errors or double transactions, while streamlining bill payment through BMO Bill Connect. Cash management solutions like this allow you to effortlessly manage accounts payables and accounts receivables. Try it for 60 days, at no cost.
  • BMO Digital Banking: Manage your business cash flow from your mobile phone or computer using BMO Digital Banking. You can review transactions, pay bills, and transfer funds.

Through these cash flow management services, you can keep your finger on the pulse of your business and assess its financial health. By looking at trends, simplifying operating procedures, and streamlining payments, you can effectively manage cash flow in the short term and long term.       

Advantages of using cash management services for your business

If you’re a small business, cash management may not be at the top of your to-do list. But neglecting this part of your business could put you in a vulnerable spot. Using cash management tools, you can help improve your business’s cash flow. Some advantages of using cash management services for your business include:

  • Simplify AP/AR: Using one central service like Bill Connect, you can alleviate stress around managing accounts payables and receivables by having everything in one place
  • Send and receive payments ASAP: There’s no need to wait for payments using Zelle®. Whether a customer is paying you or you’re paying a vendor, you can process payments in a few clicks.
  • Save time and money: Using Remote Deposit, you can save time and money by skipping the trip to the bank. No more deposit slips or waiting in line.
  • Accept payments anywhere: Worldpay from FIS® helps you simplify customer credit or debit card payments and gives you the tools to accept payments on-the-go, or wherever you are.
  • Outsource payroll: Say goodbye to manual payroll processing and let cash management solutions like Paychex® do the heavy lifting. The company will calculate payroll taxes and pay them for you.
  • Accessibility: Using BMO Digital Banking, easily access your accounts, set up transfers, pay bills, and more.
  • Review your business finances: Using the right cash management solutions, you can review cash inflows and outflows and see your business finances from a different vantage point.

Depending on your needs, you can use a few cash management tools or all of them to help you seamlessly run your business.

Cash management solutions for business payables and receivables

A major part of your business is navigating between accounts payables and accounts receivables. In other words, the money that you pay and the money that is paid to you.

For the longevity and health of your business, it’s key to have enough liquid cash on hand for operations and investments for the future. But if you have more money going out than coming in, it could spell trouble for your business. Using the appropriate cash management solutions for your business can help.

If you’re spending too much time on administrative tasks like manual payroll, it can take time away from working on higher level tasks that could bring the business money. Choosing to use payroll processing services can free up hours of your week and manage payroll taxes. That way you can work on income-producing activities, rather than be bogged down doing it yourself.

Automated clearing house and wire payment services

You need to efficiently and securely collect and disburse electronic payments to your suppliers, employees, and customers. With Automated Clearing House (ACH) you can send and receive payments more economically than through paper checks. Move funds to and from client, vendor and employee accounts in simple, secure and cost-effective manner.

Sending high dollar value, time sensitive, domestic, and international payments is an important part of running your business. Rely on BMO Online Banking to make your wire payments quickly and securely. Pay no wire transfer fee on smaller international payments options. They are available through BMO Global Pay.

Key takeaways

As a business owner, you’re constantly dealing with shifting priorities and juggling a lot of demands. It’s easy to let cash management fall to the wayside. But effectively managing cash flow can be the buoy you need to keep things afloat.

The good news is you don’t have to do it all by yourself. Using BMO’s cash management services, you can get the support you need for a more seamless approach to your business finances.

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