Outdated Cash Management Practices Could Be Hurting Your Agency

Does your agency still deposit checks manually? Is your cash-management system up to date? Are you aware of the latest cyber protections?

Old habits and outdated office procedures could be hurting your agency. Here are three ways to improve efficiency and employee productivity in your banking, cash-management and security practices:

1) Modernize your banking. Many agencies are unaware of the savings they can achieve by modernizing their banking. Start by asking your bank for a financial review. Perhaps you still prepare deposit tickets by hand and spend time going to the bank. Collection of premium payments, receivables and carrier payments can all be performed electronically.

Remote deposit capture (RDC), automated clearing house (ACH) transactions and mobile banking have been around for quite a while, but agencies have been slow to adopt these technologies. RDC allows access to funds several days faster than traditional deposit methods and gives you an electronic record of checks that can be easily searched.

Scheduling debits and credits automatically via ACH is more convenient than writing, mailing, receiving and processing paper checks. Also, check approvers can approve ACH payments securely online from anywhere. Business mobility apps allow you to make deposits and transfers on your mobile device. You can even approve bill payments, positive pay exceptions, ACH file transfers and wire transfers.

2) Automate your cash management. Cash management can seem daunting, especially if you’re trying to do it yourself. Not having the time to focus on your daily cash position or not having the discipline to make timely transfers can result in missed opportunities and inefficiencies.

Consider using sweep accounts and zero-balance checking accounts, which can automatically put your unused funds to work in higher-yielding instruments. These accounts allow you to manage everyday transactions while pursuing long-term financial goals. You can set targets so that money is automatically transferred into a money market fund or other investments.

3) Stop fraud. Cybercrime is a serious threat, but did you know that old-fashioned check fraud still is a big risk?  Positive Pay is one solution banks offer to prevent losses from fraudulent check writing and ACH transactions.Your bank will report discrepancies to you before a payment is made, preventing thieves from stealing from you.

Cybercriminals also can defraud your agency through various social engineering attacks. Employees are tricked by email into divulging credentials, downloading malware or initiating bogus wire transfers. Every agency needs to have a solid cybersecurity plan in place.

Protect your assets, improve your cash flow and increase productivity by working with a good banking partner. Don’t fall behind your competitors by clinging to outdated management and security practices.

Patricia Smith is vice president and business development officer of InsurBanc. A division of Connecticut Community Bank, N.A., InsurBanc is a community-focused commercial bank specializing in products and services for independent insurance agencies.

This article was originally published in the June issue of Independent Agent magazine. Check out highlights from the latest issue or read the full issue.