UMB Bank
Alissa Kolm
As economic uncertainty lingers, we continue to see familiar pain points for many clients when it comes to operating under current conditions. From adequate liquidity for operations to cash management strategies, UMB is regularly advising clients on how to address these pain points while creating efficiencies using a customized approach.
Ways to Optimize Liquidity
Businesses need access to cash. It may sound simple, but with fluctuating rates and the higher cost to borrow money, optimizing liquidity — and doing so prudently — is crucial to achieving long-term growth and business goals.
A successful liquidity management strategy depends not only on identifying the timing of specific cash needs and cash flow patterns, but also appetite for risk. While cash to cover operating costs should be kept in short term, low-risk products, long-term strategic capital may be able to endure greater fluctuations.
Strategies to Improve Cash Flow
The most effective cash management strategies include a multi-layered approach that offers flexibility and versatility to put your cash to work for you.
Talking with your vendors, suppliers, and customers to explore opportunities for better payment terms is one way to improve cash flow.
Another way to improve cash flow and efficiency is through developing a payment strategy centered on electronic payments:
- Commercial card: reduces the time and money spent on processing paper checks, minimizes fraud risk, allows you to place controls around transactions, and potentially creates a new revenue stream by allowing you to earn a rebate on payments made.
- ACH: offers a real-time, low cost, and widely accepted alternative to card.
- Wires: provide a fast, secure way of final payment in a real-time, same-day basis. International payments are commonly made via wire.
Understanding and Preventing Fraud
Fraud is on the rise, and as banks increase the ways they are protecting against it, fraudsters are changing their tactics as well. This makes it even more important for customers to not only understand the types of fraud out there, but also how products and services can help prevent it.
The most common types of fraud we are seeing today include:
Check Fraud
Check fraud occurs when the scammer steals a check out of the mail, acquires banking information and prints fraudulent checks. Positive Pay and Reverse Positive Pay offer another layer of protection against fraud. Positive Pay requires a record of the check issue information to make it easier to spot fraudulent transactions, while Reverse Positive Pay allows a designated approver to review checks received by the bank to determine whether it should be paid.
Phishing or Business Email Fraud
Phishing, also called business email fraud, occurs when someone poses as a trusted vendor and emails a company notifying them of a change in bank routing information. When the business sends payment using the new routing information, the money goes to the scammer rather than the intended recipient.
The best way to prevent business email fraud is to call your banker or the vendor to verify out-of-the-ordinary requests.
During these rapidly changing and unpredictable times, having a relationship with your banker who can help navigate these — and other — pain points is imperative to efficiently and effectively working toward your business goals for ultimate success.
For more information: UMB Bank
Alissa Kolm is an assistant vice president, commercial relationship manager for UMB Bank. Since 1913, UMB has remained focused on cultivating relationships based on integrity and quality and helping clients achieve their goals. For more than 110 years, we've operated with high-touch service, prudent business practices, and a stable balance sheet that allow us to weather all economic cycles and continue to serve our clients.