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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.

Updated

9 min. read

- Cash management services can streamline how you pay and get paid, and can help monitor transactions, forecast future cash needs, maintain optimal cash reserves, and optimize your business's cash flow.
- Cash management services include services such as merchant services, check processing, payroll processing, and more.
- Cash management services can help a range of businesses and nonprofit organizations.

Running a business requires a lot of time. You can count on a lot of moving parts and a lot of changing priorities. Another thing business owners can count on is the importance of cash flow, or the funds that come in and out of your business.

Cash management services help owners handle those funds so their operations run smoothly—without experiencing cash crunches or the hoarding of underutilized cash. It’s a delicate balance.

What is cash management, and why is it important?

Cash management includes a range of practices and strategies to help ensure your business is set up to handle daily operations and long-term growth. Cash management can help monitor transactions, forecast future cash needs, maintain optimal cash reserves, and optimize your business's cash flow.

Through this process, you can help ensure the money flowing through your business goes where you want, at just the right time.

Your cash positions can reveal:

How stable the business is
Your ability to invest in your company
If the business can pay its expenses on time
How to invest to grow your business
The business's liquidity

If your cash flow isn’t well-managed, it could sink your business. The right cash management services can help you stay on top of your business and financial goals.

What are cash management services?

Cash management services are tools and resources that help you manage your business's cash flow. Through these services, you can streamline how you pay and get paid. Cash management services may be a part of business banking and help you simplify how money flows through your business.

Accepting Payments

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 Elavon, which allows you to easily accept card payments 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 sales proceeds even faster.
Check processing: One of the basics of running a business, processing a check, used to require a trip to the bank, so the check could be deposited, verified, and cleared for payment. But as many banks offer digital checking services, the process can become fully automated, often with the added benefit of enhanced fraud protection.
Remote deposit: Skip the trip to the bank and deposit paper checks through remote deposit. Deposits are processed the 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.

Making Payments

Payroll processing: Paying employees is a time-intensive yet essential responsibility 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.
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 Digital Banking: Manage your business cash flow from your smartphone, mobile device, or computer using BMO Digital Banking. You can review transactions, pay bills, and transfer funds, knowing that security is BMO's priority. With our Digital Banking guarantee, you will never have to pay for unauthorized transactions.
Business credit cards: Keeping business and personal finances separate can help your business accounting, planning, and tracking go a lot smoother. Consider a business credit card separate from a personal credit card, which will help you monitor business expenses and streamline your record keeping.

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

Cash management services are tools and resources that help you manage your business's cash flow, and fall under services to accept or make payments.

Benefits of cash management services

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 can alleviate stress around managing accounts payable (AP) and receivable (AR) 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: Elavon helps you simplify customer credit or debit card payments and gives you the tools to accept payments on the go, or wherever you are. Elavon can also provide key support in other areas, including e-commerce services, payment optimization programs designed to reduce card acceptance costs and risk, and point-of-sale (POS) solutions tailored to your industry.
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.

Some benefits of cash management services include simplifying accounts payable and accounts receivable, accessibility, and ability to accept payments everywhere.

Cash management solutions: payables and receivables

Business owners can spend a lot of time navigating between accounts payable and accounts receivable: paying expenses and getting paid.

For the longevity and health of your business, it’s important to have enough liquid cash on hand for operations and future investments. 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 higher-level tasks that could drive more revenue. Choosing to use payroll processing services, for example, can free up hours of your week and manage payroll taxes. That way, you can work on income-producing activities, rather than being bogged down doing it yourself.

Industry examples of cash management services

Cash management services can help a range of businesses and nonprofit enterprises. Here are some ways you could be using cash management services to improve your operations:

Retail

Whether you're running a pet supply store, a children's clothing boutique, or a neighborhood coffee shop, you will need a POS system for accepting payments — both in-store and online — as well as features like sales tracking, payment processing reports, and payroll automation.

Manufacturing

Staying nimble in the manufacturing sector is key, especially if your suppliers and markets extend across multiple time zones. Cash management services can help you make international payments to suppliers for raw materials, set up auto bill payments for utilities and insurance, and simplify other payments and collections processes within the supply chain.

Schools

At the start of each term, private schools face a deluge of tuition payments. For this type of seasonal enterprise, cash management services can not only help automate payment processing but also provide insights into enrollment and funding sources, including grants, donations, and other types of income.

Hospitality

It's become standard procedure for hotels and restaurants to deploy POS and other cash management systems to handle a range of potentially time-consuming tasks, from expediting tableside and online orders, managing third-party platforms for online orders, and processing bookings, to charting floor plans and tables for reservations and events, automating payroll, and paying suppliers.

The sector has also come to rely on strategic features such as payment optimization and commercial card optimization, which captures additional details on business card transactions to potentially qualify the transaction for lower interchange rates and greater savings.

With payment optimization, a business can use payment data to process transactions more efficiently, and potentially lower payment acceptance costs, improve approval rates, and reduce chargebacks. With commercial card optimization, certain businesses that accept a significant number of corporate card payments may be able to qualify eligible payments for lower interchange rates on big or recurring business-to-business payments based on additional data from these transactions.

Nonprofit

For nonprofit organizations, accepting debit and credit payments is a necessary convenience to attract donors, big and small. But cash management services can also generate real-time payment reports and create flexible payment solutions, such as portable card readers for street canvassing and community events. BMO's merchant services partner, Elavon, can also set up a credit card surcharge feature that allows your supporters to include the processing fee with their donations, subject to local regulations.

Cash management services are not just for retail businesses and can help a range of businesses across different industries and nonprofit organizations.

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 a simple, secure, and cost-effective manner.

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

Cash management services are key

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.