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The Smart Investor’s Guide to Cash Management Services

cash management sercive


Whether you’re a business owner or a private client with capital you want to put to work, cash management is a channel you might want to dive further into. Here’s how the service works and reasons why you should consider adding it to your portfolio.


What Is It?

cash flow managementIn a nutshell, cash management encapsulates a much bigger area of finance that involves the collection, management, and consumption of cash. Using specific techniques, algorithms, and data resources, banks are able to assess market liquidity, cash flow, and financial vehicles.

In banking terms, management services refer to certain operations related to cash flow, which is offered mainly to big companies as well as private high net worth clients. Financial vehicles that are used with cash managing services include T-bills, CDs, and money market funds.


Common Services Offered

Account reconciliation

account reconciliationBusinesses, large and small, find it difficult to balance their growing checkbooks. In its lifetime, a business can issue thousands of checks, which takes tremendous amount of effort in monitoring which checks have cleared and which ones haven’t. Banks offer account reconciliation as a sub-service of their cash managing department. Account reconciliation allows companies to update a list of all checks that they issue every day. Every month, the bank statement will display both cleared and uncleared checks.


Web services

Many banks have a web-based infrastructure, which is notably more advanced than the ones offered to regular clients. The web tools allow managers to generate and authorize specific internal account credentials, which allow their workforce to send wires and tap into exclusive management features.


web services


Physical transfer of cash

Big companies that make a great sum of cash may need protection when moving it. Management clients can have the bank pick up the cash via an armored vehicle rather than asking employees to make frequent deposits.


armored car

armored vehicle


Wire transfer

Although not relatively new to the banking industry, wire transfers are one of the most popular sub-services of cash managing. It can be accomplished either through bank account or cash office transfers. Bank wire transfers are usually the most convenient and fastest method of transferring cash between bank accounts.


Benefits of the Service Line

As a banking client, you get the benefits of accessing a broader range of services that specifically align with your needs and demands. Balance reporting services, for example, fit the need of corporate clients who actively facilitate their cash balances. Meanwhile, wholesale and retail businesses can benefit from lockbox services to secure frequently received payments.

Banks that specialize in cash management services benefit tremendously as they have the ability to appeal to more clients over time. High net worth clients and big companies often look for institutions that can efficiently and specifically cater to their cash flow demands. Corporate firms also look for easier and simpler methods of depositing large sums of cash into their bank accounts.

Cash managing services can be expensive, yet the costs to the client or company are easily outweighed by the benefits, particularly cost savings, precision, and maximized efficiency, over the long-term.