How Effective Cash Management is Helping Businesses Through the Pandemic

Business manager turning dials labeled expenses and income that control a meter labeled cash flow.

Having an effective cash flow management plan is vital to long-term business success. It can be especially important when markets are volatile, and the economy is unstable. During the COVID-19 pandemic, many businesses were forced to cease operations during lockdowns, and some never reopened.

The reality is, the pandemic 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, Still, without proper planning, they could be taking on unnecessary risks.

Safety is Paramount in an Effective Cash Management Plan

During challenging economic times, just about any type of business can fail, even a bank. That’s why keeping reserve cash protected is a crucial aspect of any cash management plan. Most banks provide a certain amount of protection through FDIC insurance, but there are limits that should be understood.

Beware of FDIC Limits

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

However, with FDIC deposit coverage limited to $250,000 per business at each member bank, many companies find themselves with more cash than FDIC can protect at their bank. That’s why our company, the American Deposit Management Co. [ADM] was founded – to solve this problem.

ADM created the AMMA™ account to provide the most protection and the most return for business cash reserves. An AMMA™ account gives businesses access to unlimited FDIC coverage for all their reserve cash, with a single deposit and a single monthly statement. To learn more about how to get started with an AMMA account, click here.

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 significantly 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 the most competitive return available. That’s what we call Smarter Cash™. It only takes a few minutes to get started, and the best part about an AMMA™ account is you keep your current bank.

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 the MOST 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.