Collaborating with your bank to optimize your payment solutions

Small business decision-makers know that every dollar counts. From ensuring healthy inventory levels to getting timely payments, to stopping fraud in its tracks, you work hard to earn your bottom line, which is why streamlining business processes can be so essential. Now is the time to work smarter, not harder.

When used in a strategic way, technology can be a powerful force for organizations to gain efficiencies, as well as to transform the customer experience and maximize profits.

The cost of digital tools can be a meaningful amount of money for a small business, and many organizations benefit from a bank that has experience in their industry and can offer competitive treasury solutions. Collaborating with your bank to optimize payment processes can open opportunities to increase liquidity.

What could your organization do with more cash on hand?

Simplify customer payment options

Your bank should offer merchant services that support various types of payment acceptance, such as credit card processing, mobile payments and electronic invoicing. Digital payments make it easy for customers who love your product or service to purchase it again and again — quickly, securely and conveniently.

As added functionality, many online banking platforms allow businesses to manage their accounts from a single user-friendly dashboard. Imagine having access to seamless insights that anyone on the finance team can access.

Streamline accounts payable/receivable processes

Your finance team works hard to track payments and expenses, pay employees and perform thorough record-keeping while helping the business cut down on unnecessary spending. But there are only so many hours in the day.

Your bank can shoulder some of your accounts payable and accounts receivable processes by automating certain manual tasks. For example, automated payment options, such as ACH transfers and sweep services, can further reduce the need for manual data entry and processing. For a small business, using ACH origination offers a more efficient method to pay expenses or collect on services provided, which leads to stronger management of day-to-day operating cash flow.

Another perk of these digital tools is that you can get paid faster in some cases. Some banks offer same-day ACH transactions, which are settled on the same day they’re sent. This can help decrease the time a business waits to get paid and should reduce the number of outstanding payments, which can help you estimate cash forecasts more accurately.

Unloading manual tasks allows you more control over your cash flow, and your highly skilled finance team can focus on higher-value tasks related to, for example, long-term investments or strategic development.

Minimize fraud

Businesses are estimated to lose around 5% of their revenue each year because of fraud, with the average loss per incident being $1,783,000, according to a 2022 report by the Association of Certified Fraud Examiners. The report cites a lack of internal controls as the culprit in nearly half of cases.

Fraud protection should be one of the first tools a business implements to ensure its funds are protected. Companies can lose tens of thousands of dollars from even a single fraud attempt, which would greatly impact a small business’ day-to-day operations.

Your bank most likely has solutions you can utilize right away, such as:

• Set up multiple ways for employees to verify their identity or login credentials to keep employees’ privacy confidential and business data secure. Plus, you can set up rules for receivables and payable routing and processing to help lower your fraud risk.

• Review and approve transactions, including check payments and ACH debits, to ensure they are legitimate before you release funds. Positive pay also gives you or your team the ability to review flagged transactions and block payees not on your approved list.

• Stay vigilant by utilizing fraud protection services that alert you of suspicious account activity right away. The sooner you can identify fraud attempts, the faster you can work with your bank to minimize losses.

You’ll want to discuss specific needs with your bank, as they can recommend a tailored approach. Preventive measures to mitigate fraud and reduce risk can be worth the peace of mind, especially with the heavy cost of fraud incidents.

The bottom line

As a small business decision-maker, you may be a jack of all trades: presenting to new clients, chasing outstanding payments, staying knowledgeable about fraud mitigation and maybe even pitching in on the sales floor.

Streamlining is a smart strategy to offload manual tasks and to put you in touch with the parts of the business you’re most enthusiastic about. Teaming up with a bank that has expertise in your industry or community can be a win-win. Your bank’s tools can have measurable effects in combating fraud, optimizing payment solutions and scaling the business.

When looking for a lending and treasury partner, find a bank that wants to see your business grow and not only as a number. You want to make sure that they’re continuing to help your business find efficiencies. Small businesses that are able to collaborate with their banks to maximize cash flow and liquidity and minimize fraud risk will be at an advantage.

• Sandra Fleck is senior vice president and treasury management director for Byline Bank, a member of FDIC and an Equal Housing Lender.