What is Cash Management in the Context of B2B Banking?

Jun 05, 2024

What is Cash Management in the Context of B2B Banking?

Cash management in the context of business to business banking includes all tasks and measures in a company that are carried out to ensure liquidity and efficiency in liquidity management. The focus is on managing a company's liquid assets.

In the cash management in B2B banking process, a company's cash flows are controlled, monitored and controlled with the aim of securing the company's liquidity and solvency at all times.

One goal of cash management in B2B banking is to optimize company reliability based on available liquid assets, with maximizing interest income to generate a surplus and minimizing transaction costs as the main objectives.

Thanks to fintechs, bigtechs, neobanks and neobrokers, the offerings for end customers in the financial sector have developed positively in recent years thanks to increased competition.

The pressure has increased for B2B banks because the new market participants can better respond to the changing needs of customers with their innovative software solutions, integrated platform offerings and contemporary offerings.

At the same time, opportunities have also arisen because in many cases the expertise of banks, even in the background as processors, is required.

What is Cash Management?

Cash management, also known as liquidity management, includes the entire management of a company's liquidity. This includes financial planning, efficient cost management and investing the surplus to ensure solvency.

Cash management focuses on the cash flows of the coming days and at the same time includes long-term liquidity planning. Favorable exchange rates for foreign currencies or attractive interest rate offers can hardly be predicted, which is why a short-term reaction to such conditions is particularly important.

For every business scenario, such as less revenue, higher costs, etc., liquidity management must find a solution.

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How is Cash Management Done?

Smooth and optimized payment transactions is the goal of every cash management. This is not so easy with complex companies, as liquidity must be managed in such a way that payment flow is guaranteed, excess cash is invested where it is needed and every available information is meaningfully evaluated.

Anyone who has more than one account, possibly even with more than one savings bank or bank, or who even has global business relationships, needs a good cash manager.

Cash management primarily involves ensuring company liquidity. It should always be possible to keep an overview of income and expenses from all accounts so that information about liquidity can be accessed quickly at any time.

In the context of liquidity planning, the future cash flow should also be planned and anticipated in order to be able to estimate the required liquid funds and, if necessary, use excess liquidity profitably.

You can reach a reliable and reputable B2B banking platform like Jetonbank to get successful cash management for your business. Like a private banking account, you can face many tips and tools to provide cash management in great ways.

Is Cash Management Possible with a B2B Account?

It is possible to succeed in cash management through a B2B account. The fundamental task of cash management is to ensure the company's solvency at all times.

This is done, among other things, by optimizing payment transactions and costs, controlling cash flow and sensibly managing the surplus through investments or reserves.

Simply monitoring incoming and outgoing payments on accounts is not enough for optimal cash management. Payment transactions and cash flow management need to be controlled and planned in a targeted manner.

Cash managers or management take on many complex tasks and immense responsibility. We will now show you the three major challenges you face as a person in charge.

When transferring money and cash, costs should be as low as possible - be it through transaction fees or exchange rate fluctuations in international cash pooling. But pooling liquidity into as few accounts as possible that are actually used is also a way to save costs.

Your savings bank will be happy to assist you with all of these tasks, each of which requires a high level of expertise.

For example, together with our experts you can discuss which software solution from our financial group is best suited for your company. Use our knowledge and that of our global partners profitably.

Successful cash management creates an information and transaction system that, for example, collects relevant data about payment flows. Using the collected data, liquidity management can be optimized because liquidity deficits and surpluses can be identified more quickly.

A transparent overview of the payment flows in a company enables optimized savings on the cost side. This gives companies the opportunity to avoid a loan, which has a negative impact on liquidity.

Effective cash management ensures quicker visibility of open items in the company and avoids the company becoming insolvent when outstanding claims need to be settled.

Ways to Manage Budget with B2B Banking

Operating costs can be determined quickly with the analyzes made in liquidity planning. Standard costs of water, electricity and heating can be reduced with simple solutions such as energy-saving devices, electric thermostats or switching providers.

But these aren't the only savings options.

Daily payment transactions can also cause high costs. If a company has more than one account through which payments are processed, applicable fees will be charged.

Here you have to ask yourself whether all the calculations are really necessary. Maybe even centralizing liquidity (cash pooling) makes sense.

All assets are stored in a single account and distributed from there. In this way, overdraft accounts can be balanced and negative interest rates can be prevented.

But the cash pool also brings risks, for example in the event of bankruptcy. In case the parent company goes bankrupt, the cash pool is part of the property subject to bankruptcy. In this case, payments to other affiliates will no longer be possible.

If you want to reduce costs in the long run, you should not keep consumer patterns in the wrong places.

For example, if you invest in a new machine, it will have initial costs. However, if this improves the efficiency of processes by using fewer resources and also increases productivity, the company achieves higher cash flow.

In the long run, the company benefits from smart cash management as it saves time and resources.

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Can You Make Profit by Cash Management with B2B Banking?

Businesses earn profits thanks to cash management methods through business to business banking, or simply B2B banking accounts.

Businesses can implement cash management strategies by taking advantage of the tools offered by B2B banking accounts and banking platforms.

While providing different financial services such as optimizing liquidity for businesses, placing collection processes on a correct schedule, and planning payments with B2B banking accounts, businesses increase their profit margin.

Regardless of the sector they work in, businesses need different strategies to increase their financial processes and profit margins. These make it even easier with the automated cash management types and tools offered by B2B banking accounts.

If you need the fastest and most reliable cash management tools and tips for your business, you can open your online B2B banking account through Jetonbank.

As Jetonbank, we offer our great experience in digital banking not only for personal accounts but also for B2B banking dynamics. If you desire a better cash management process for your business, do not hesitate to contact Jetonbank right now.

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The opinions expressed in this blog are solely those of the author and should not be regarded as expert financial advice. Before engaging in trading, you should consult an independent and suitably licenced financial advisor to ensure that you understand the risks and have the necessary experience and knowledge. Under no circumstances will Jetonbank be liable for any direct, indirect, special, consequential, or incidental damages. Jetonbank is also not responsible for any losses that may arise from reliance on any recommendation, forecast, or other information provided. Past performance does not predict future results. The value of investments can fall as well as rise. We value your participation in our discussions and welcome diverse viewpoints.


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Jeton Bank Limited is licenced and authorised by the Financial Services Unit, Ministry of Finance of the Commonwealth of Dominica, licenced as a banking institution under the International Banking Act, fully authorised to provide services to clients worldwide, under the prudential supervision of the Financial Services Unit. Jeton Bank Limited is registered in the Commonwealth of Dominica, Company Number 2022/C0175, with its registered address at 1st Floor, 43 Great George Street, Roseau, Commonwealth of Dominica, Post Code: 00109-8000. LEI Code: 894500XGIX3R4HCIOC29.

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