Collaborating with Your Bank | Payment Solutions

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As a small business decision-maker, you know 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 your 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 your organization to gain efficiencies, as well as to transform the customer experience and maximize profits.

The cost of digital tools or products 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 your liquidity.

What could your organization do with more cash on hand?

Simplify customer payment options

Cash flow is the lifeblood of any business. Although you may know the importance of sound cash flow management, some forces are beyond your business’s control. A smart strategy is to develop a contingency plan to ensure constraints don’t negatively affect cash flow.

One solution is to team up with a bank that offers personalized tools.

When determining the right financial tools to use, Sandra Fleck, Senior Vice President of Treasury Management at Byline Bank, says small businesses should partner with a bank that is willing to work with them side by side. “When you work with a bank that supports you as an advisor, they want to see your business grow and succeed.”

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 and accounts receivable processes

Automating tasks illustration Your finance team works hard to track payments and expenses, pay employees and perform thorough recordkeeping 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,” says Fleck.

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.

At Byline, we take the time to get to know your business. Whether you’d like to improve cash flow, expand operations or update equipment, our team can customize financing and treasury solutions to help. Get in touch.

Minimize fraud

Two-factor authentication illustration 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. A typical fraud case goes undetected for 12 months and costs about $8,300 per month (or $99,600 total, if undetected for the full 12 months). The report cites a lack of internal controls as the culprit in nearly half of cases.

“Fraud protection is so very critical for our small businesses, and it should be one of the first tools a business implements to ensure its funds are protected,” says Fleck. “Companies can lose tens of thousands of dollars from even a single fraud attempt, which would greatly impact a small business’s day-to-day operations.”

To start, small businesses can conduct a risk assessment. From there, your bank most likely has solutions you can utilize right away, many of which can be straightforward to implement.

Some of these tools may include:

Two-factor authentication: Protect sensitive information from cyberattacks. Setting up multiple ways for employees to verify their identity or login credentials is a smart practice to not only keep your employees’ privacy confidential but also keep business data secure. Plus, you can set up rules for receivables and payable routing and processing to help lower your fraud risk.
Positive pay: 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.
Fraud monitoring and detection: 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. Preventative 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. The challenges and opportunities of your role may have become even more complex as the economic and business environment becomes increasingly uncertain.

Small businesses are economically integral to their community, and many folks stay invested in their small businesses simply because they’re passionate about their product or service, or the community they serve.

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.

For small businesses looking for a lending and treasury partner, Fleck points out how crucial it is to find a bank that’s willing to work with you.

“Find a bank that wants to see your business grow and not only as a number,” she says. “You want to make sure that they’re looking out for your business and continuing to help find efficiencies.”

Small businesses that collaborate with their banks to maximize their cash flow and liquidity and minimize their fraud risk will be at an advantage.