Nothing has been highlighted more in the past 15 months than the importance of positive cash flow, especially in certain industries more directly affected by the pandemic. Understanding the cash position of your firm and the predictability of flows are key to the planning cycle.
In this particular posting at Affordable Housing Finance, written by staff at JPMorgan Chase, we have an example of how bank-provided treasury services can help manage such complications and keep your business afloat. The case offered in this piece is around building owners of affordable housing units.
‘The questions seem simple enough: Who are you paying? How are you paying them? Who are you collecting payments from, and how?…Yet, as most multifamily affordable housing owners and operators will tell you, answering those questions is seldom simple or easy….Cash management and accounts receivable/payable is a rolling challenge—especially amid widespread disruption, like a global pandemic. Knowing with precision what your cash position is at any point in time requires exceptional reporting methods. This is all the more true when receipts are arriving from all sorts of directions, such as: Checks; Money orders; Payment subsidies from local, state, or federal sources; and Wire transfers from funding sources.’
The piece goes on to mention the types of assistance that the bank can offer its clients, including those that may be assumed to carry a fee but are absorbed as part of the relationship. The ability to digitize processes in cash operations is very important to controlling an organization’s liquidity position, especially in uncertain times.
Taking advantage of professional services is something that these types of firms should be considering. As more data is available in digital form, the ability to utilize that data with modern tech creates further opportunities to improve working capital as a strategic advantage.
‘“Owners and operators should have a strategic perspective on the best ways to finance their projects and how to best leverage working capital,” he says….Businesses ought to embrace the opportunities that treasury services present. Consider banking partners with the talent, resources, and commitment needed to transform your treasury functions into a strategic business asset.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group
