Cash Management Resource Guide for Business

A businessperson holding U.S. 100 dollar bills overlayed with a candlestick chart – the image is meant to indicate that technology is changing cash flow management for business.

Whether you are new to business cash management or have decades of experience, there’s always more to learn in this age of rapid technological advancement. That’s because financial technology [fintech] is changing the way businesses manage their cash. By familiarizing yourself with the advanced fintech resources detailed in this article, your business will be equipped with a cache of new tools and services that are designed to drive more profits and reduce your workload.

Reserve Cash Management with AMMA™: Access to Extended Protection and Competitive Returns for Business Cash

Almost all businesses need some liquid cash in reserve to manage their day-to-day and emergency expenses. But in many cases, those reserved funds are sitting idly in a bank account that can neither offer full FDIC protection (in excess of the $250k limit) nor a competitive return. These businesses are leaving profits on the table.

With the advent of fintech, the days of excessive risk and lost returns for cash managers are over. Our company, The American Deposit Management Co. [ADM], has leveraged our proprietary fintech to provide access to extended protection and competitive returns for your reserve cash. We have accomplished this by developing a network of hundreds of banks and credit unions that compete for your deposits.

Our distributed network of financial institutions, combined with our revolutionary fintech, provides businesses with access to the FDIC / NCUA protection they need. We make this a reality without the excessive labor involved in managing multiple banking relationships, statements, and reconciliations. All it takes to get started is a short, simple application. Then within a few hours, your company can make its first deposit into a new AMMA™ account at ADM.

Once you’ve made the deposit, your work is virtually over. Our team then distributes your cash to our network to provide access to 100% protection, next-day liquidity, and nationally competitive returns. You can then monitor your funds using our convenient online portal and perform your reconciliations with a single, consolidated monthly statement. ADM can even extend this technology to optimize bond proceeds and referendum funds for government organizations. The best part about all of this is, you keep your current bank. We are here to enhance your bank, not replace it.

Beware of FDIC / NCUA Limits

The most robust protection available for cash is FDIC / NCUA insurance, as these programs are backed by the full faith and credit of the United States Government. The FDIC website states that “since the FDIC was established in 1933, no depositor has lost one penny of FDIC-insured accounts.”

However, with deposit coverage limited to $250,000 per business at each member institution, many companies find themselves with more cash than FDIC / NCUA can protect at their bank. That’s why ADM was founded – to solve this problem. ADM created the AMMA™ account to provide access to extended government protection and competitive returns for business cash reserves.

Idle Cash Equals Lost Opportunity

Although protecting cash reserves is priority number one, it would be unwise to let reserves sit idle in an account at the bank. Most banks can offer a return on business cash, but those rates can change daily, based on many factors. In addition, with rates as low as they are today, finding any significant return can be a challenge.

Rates of return can also vary greatly between banks and geographic locations. Because of this, it would be difficult for most businesses to ensure their cash earns the most competitive return available without maintaining relationships with multiple banks across the country. And historically, the effort outweighed the benefits.

Today, businesses can open an AMMA™ account by ADM that provides a robust solution to this issue. With this account, banks across the country compete for your deposits, ensuring your reserve cash is earning a nationally competitive return. That’s what we call Smarter Cash™.

How has fintech changed short-term cash management?

ADM has revolutionized short-term cash management with our proprietary fintech.  Our technology overcomes the limitations of participating in programs such as the Insured Cash Sweep [ICS]. That’s because we have solved the 2 major issues outlined above, safety and return with our AMMA™ account.

How can fintech improve long-term cash management for businesses?

For those organizations whose cash needs are not as immediate, fintech can improve the safety and return on their invested cash. By applying this new financial technology to classic investment strategies, such as CD ladders, businesses can leverage the power of a network of banks and credit unions to achieve full FDIC / NCUA protection and competitive returns. ADM’s proprietary network of financial institutions allows those banks and credit unions to compete for your business’s cash without the limitations of programs like Certificate of Deposit Account Registry Service [CDARS].

This means strategies like CD ladders can be applied to the entire banking network to find nationally competitive returns for each CD term. In addition, with an AMMA™ account, your business will have access to various insurance program options, which can provide the same protection as FDIC for a lower cost in some cases. Again, this all happens through the AMMA™ account, so your business gets a single, consolidated account statement to simplify management and reconciliations.

Business Escrow Accounts Enhanced by Fintech

If your organization is planning a large order or a major transaction, you may need a business escrow account. There are many business escrow agents in the market today but be careful. All escrow agents are not created equal.

The overriding goal of an escrow account is to ensure that funds for a particular transaction are 100% safe and in the hands of a 3rd party until the transaction is complete. This seems simple enough, but there are some things you should know.

First, the most robust protection available for your escrow cash is FDIC / NCUA insurance, and again, that is because it carries the full faith and credit of the U.S. Government. So, you should seek an escrow agent, like ADM, that can ensure your funds are fully protected by FDIC / NCUA insurance. Many escrow agents do not have this capability. However, a business escrow account at ADM provides all the safety and return of our AMMA™ accounts.

Fintech Streamlines Vendor Payments

One of the biggest risks to your business cash is Accounts Payable [A/P] fraud. In fact, in recent years, payment fraud has reached record levels at corporations. A/P fraud can come in many forms, such as internal employee fraud, phishing scams, or even the simple impersonation of one of your vendors.

To help ensure that your company doesn’t fall victim to A/P fraud, one important service you can implement is centralized vendor payments. With the ADM Vendor Payments service, your payments are verified and processed by our team to ensure accuracy and timeliness. By simply moving to a 3rd party processor, you can greatly reduce the opportunity for internal fraud in your A/P processes. But that is just the beginning of the benefits that fintech can provide to your business.

Centralizing your vendor payment with ADM comes with a host of other benefits. First, we save you time. Even the most complex project payment contracts will feel effortless. Next, we provide increased financial control. Then, we’ll ensure payments are administered effectively and accountability is well-documented with CSI MasterFormat™. This transparent reporting simplifies monitoring and accounting for your business. And finally, by combining vendor payment with an AMMA™ account, you can rest assured knowing your A/P funds have access to FDIC / NCUA protection and earn a competitive return.

Merchant Services: Fintech Adds Value

There is no shortage of Merchant Services providers available in the marketplace today. Almost every bank or professional organization has a package available, and each has very different costs and benefits.

At ADM, we believe that your cash should be safe and earning a competitive return from the moment those funds are received. That’s why we’ve leveraged our AMMA™ account to provide safety and competitive returns for your credit card receipts. By implementing merchant services with ADM, you’ll receive competitive processing rates, and payments to your company will be deposited directly into your AMMA™ account. Then you can rest assured your funds are as safe as possible and growing at a nationally competitive rate.

Effective Cash Management Can Help Businesses Survive Uncertainty

It should be clear by now that having an effective cash flow management plan is vital to long-term business success. Further, it can be especially important when markets are volatile, and the economy is unstable. For example, during the COVID-19 pandemic, many businesses were forced to cease operations during lockdowns, and some never reopened.

The reality is, the pandemic, the Great Recession, and many other economic catastrophes have created challenges for almost every type of business, but those with robust cash management plans were better positioned to weather the uncertainty. As a result, many of those businesses are now increasing the size of their reserves to better prepare for the next crisis, so an effective plan to manage that cash is essential.

Cash Flow Management Made Easy with AMMA™ by ADM

When you open an account with ADM, our team of cash consultants will develop a strategy to optimize the return on your cash, maintain the liquidity that you require, and ensure your cash is 100% safe. Whether you need next-day liquidity, or you are more concerned with planned cash outflows, we can develop a cash flow plan that is right for your business.

At ADM, our team is our secret sauce, and we are always working hard to ensure your money is being managed efficiently. If you’re interested in extended protection for your corporate cash, reach out to a member of our team.

If you’re looking for even more valuable insights on banking, interest rates, and effectively managing your business cash, be sure to check out our Insights page and follow ADM on TwitterFacebook, and LinkedIn.