4 Easy Ways to Take Charge of Your Business Collections


Cash flow is the lifeblood of any company. Sales and profits are important, but it’s cash that keeps the doors open and the lights on. Collecting money traditionally requires a lot of labor. Among other activities, businesses must keep track of what’s owed, send bills, receive payments, update customer records and prepare receipts for deposit.

To streamline this process, you need to eliminate as many manual activities as you can. Automation can give you more time to generate revenue rather than merely track it. It can also help cut costs, improve cash flow and reduce the risk of fraud.

Here’s a look at four digital tools that can make the collections process easier: merchant services, remote deposit capture, lockboxes and ACH.

1. Merchant services

As credit and debit cards continue to replace cash in a broad range of payment transactions, businesses are increasingly taking advantage of merchant services. Accepting cards eliminates the billing costs and float associated with traditional payment methods and makes collections easier. And with the advent of mobile payment solutions, even the smallest company can now have an efficient collections process by accepting payments online or when you are in the field with a smartphone and Internet connection.

Bottom-line benefits:

  • Potential for larger transactions and increased sales
  • Improved efficiency — payment transactions are typically settled in 24 to 72 hours in contrast to five or more days for paper checks
  • More certainty, since payments don’t bounce as they can with checks

2. Remote deposit capture

All businesses that receive checks — whether large amounts or small — can benefit from automating the deposit process with remote deposit capture. Employees use a desktop scanner and software to digitize checks and send them to their bank over a secure, encrypted Internet connection. Many remote deposit capture systems allow you to view your transaction history online and archive the records to a CD for easy retrieval. Deposits can be made at any time, and some banks provide same-day credit for deposits and extended cut-off times well into the evening.

Bottom-line benefits:

  • Time and cost savings from automating manual deposit preparation and fewer trips to the bank
  • Improved cash flow with faster access to funds
  • Better security and convenient storage of deposit records

3. Lockboxes

A lockbox allows your customers to mail payments to a post office box in your company’s name. Your bank may retrieve the remittances several times a day and credit them directly to your account. Look for a lockbox system that makes it easier to reconcile payments by sending daily reports and providing up-to-date online records and imaging of checks. Lockbox services are available for companies that receive a low volume of high-dollar remittances (wholesale lockbox) and businesses with a high volume of low-dollar remittances (retail lockbox).

Bottom-line benefits:

  • Expedited check processing
  • Easier and more accurate accounting
  • Reduced opportunity for fraud

4. ACH

The Automated Clearing House (ACH) network is a powerful collections tool. You simply enter an amount and a customer’s bank routing and account number into the system. The money moves from the customer’s account to yours on the day and time you indicate. You can enter a one-time or single-debit transaction, or you can set up recurring debits at regular intervals.

Bottom-line benefits:

  • Quick access to deposits — often within one or two days
  • Predictable expense — fees are fixed, regardless of transaction size
  • Low cost — typically a few cents per transaction

The bottom line on your bottom line

An efficient collections process is one of the most important duties of any business owner. Now you can take advantage of cost-effective technology to help manage your collections more efficiently and save time and money. Digital cash management tools also offer more security than having employees receive and send paper payments and make trips to the bank.

City National Bank offers a full array of cash management tools and services, including merchant services,remote deposit capture and lockboxes. We can also help manage collections through the Automated Clearing House. Let your City National Bank Business Banker help you choose, implement and use the tools best suited for your business. Call (800) 599-0020 for assistance.