4 Questions with Jeanne Crain
Position: Regional President, Minnesota, Business Banking, M&I Bank
Role: Providing comprehensive business banking services, from lending money to treasury management, to business clients ranging from large companies to individuals.
How can manufacturers improve cash flow?
One of the most effective ways to improve cash flow is to bring receivables in faster, which from an operational standpoint can be accomplished by offering discounts for prepayments and making invoices due upon receipt. To help your customers help you, offer flexible payment
options that fit their needs, from traditional cash or check payments to electronic and Internet bill payments.
To further streamline the process, partner with your bank on an integrated receivables system. This allows you to monitor your available cash earlier in the day and, in turn, eases decisions about investing or paying down loans or lines of credit.
What should manufacturers consider when making short-term investments?
In tough economic times, it is more important than ever to get the most out of existing funds. First, review your cash situation to determine how much "extra" you have available by taking your current cash balance and subtracting how much you'll be paying out over the next
few days, weeks and months, being sure to consider all fixed costs and receivables.
Next, determine how long you can afford to invest. If you can easily release the cash for a year or more, a certificate of deposit may be a good option. If you need access to your funds in a matter of hours or days, consider a sweep account. Sweep accounts automatically invest
cash at the end of the day in investments you choose, with minimums as low as $25,000.
What other efficiency recommendations do you have?
Automating almost any process saves time, and banking is no different. Take, for example, your current process for depositing checks. Do you send employees to the bank to make deposits when they could be more productive at work? Consider streamlining this process with remote
deposit capture; all you need is a small on-site scanner and imaging software. Similar efficiencies can be realized with direct deposit of payroll through an automated clearing-house process.
How can manufacturers better protect themselves from fraud?
Be aware of the following business fraud categories: check, credit card and ACH fraud. The most common is check fraud, based on the ease of using paper. To protect your company, always review and reconcile accounts, separate reconciliation and payment duties, truncate paid
checks and replace them with digital images. Detect and prevent corporate and commercial credit card fraud through daily online account review and installation of firewalls, anti-virus programs and spyware on company computers. Finally, guard against ACH fraud by implementing
internal controls such as routine reconciliation and quick access to return items and exception information. Fortunately, while ACH fraud is on the rise, controls inherent in the electronic payment system offer protection so that only one in six companies incurring ACH fraud
experiences a financial loss.
To learn more about any of these topices, go to
mibank.com/mytoolkit.
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