What is Treasury Management and Why Would Your Business Want It?

Written by: Alerus Financial

Many businesses think of banks primarily as a place to deposit and borrow money, but there is a whole range of services, known collectively as treasury management, that can elevate a bank from a service provider to a partner for businesses of any size.

Treasury management encompasses a scalable suite of services designed to help businesses manage their cash flow and assets safely and efficiently. Commonly used by large businesses, many small businesses can also benefit from the time savings and enhanced security they provide.

Treasury Management: Defined and Simplified

Some businesses hear “treasury management” and assume it’s meant for a business large enough to have, well, a treasury. When referred to as “cash management,” another common term, it becomes clear why it matters. Treasury management includes accounts receivable (such as check processing or receiving ACH payments), accounts payable (including bill payment and payroll), money management (including online banking and reporting), and security and fraud prevention (including account monitoring and more.) These are just representative examples—your business advisor should be able to discuss the full range of treasury management services available to you.

Who Benefits from Treasury Management

A business needn’t have large revenue to benefit from treasury management. For smaller businesses, it really comes down to the complexity of the accounts receivable and payable. If your business handles scores of transactions daily, or payment comes in many forms (cash, check, transfer, etc.), and you’re still handling all of this manually, look into treasury management. Handling foreign currency or managing business investments are also signs that treasury management is a good fit.

Start Here: ACH and Accounts Receivable

For most businesses, the obvious place to start is with ACH transfers and accounts receivable. The benefits are obvious, and businesses with different needs can tailor their levels of service. For example, a business that gets lots of checks by mail might employ people to open envelopes, endorse checks, record payments, and drive to the bank to make deposits. Or, the business might choose to enable remote check deposit, using a mobile device. For the busiest companies, the solution might be a remote deposit capture check scanner that automates the process. Any of these steps can save hours of labor per day while reducing the risk of errors or fraud.

Other Ways Treasury Management Improves Efficiency and Processes

Treasury management services often grow and change as the business’ complexity and size changes. Payroll services are a clear example. Some very large businesses need help synching up their bank accounts with internal accounting systems. Businesses of all sizes that now have employees working from home need new mobile banking solutions that keep everyone productive and aligned. These services can help a business improve its efficiency and forecasting ability.

Treasury Management as Part of Fraud Protection

Improved fraud protection is a byproduct of many treasury management services, but also is a service unto itself. Remote check capture reduces the number of times a paper check is handled, reducing fraud risk (check fraud is still the most common way businesses are cheated). But more sophisticated services like automatic ACH filters that flag suspicious activity, or dualauthorization for bank transactions, or positive pay systems that ensure an authorized payment hasn’t been modified illegally all add to financial security.

With the range of treasury management services available, it’s worth taking the time to get educated and work with an expert. Alerus offers a one-stop solution for businesses, with trusted advisors to help simplify and select the right services and subject matter experts to develop solutions for your biggest financial challenges. Stop in and talk to an Alerus business advisor today.

The information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice. Alerus does not provide legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation. Alerus Financial, N.A. is Member FDIC.

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