Build Resilience into Your Financial Operation

Jerry Brodnax, August 5, 2020

Your company needs a business continuity plan, one that addresses your financial operation. If that wasn’t clear before, it should be now — with so many businesses having a fresh memory of scrambling to figure out how to remotely execute critical daily transactions in the midst of a global pandemic.

Disasters come in all shapes and sizes — and typically when you least expect them. This year a coronavirus, maybe next year a hurricane or cyberattack. The pandemic offered a stark reminder that, in the face of such events, you need a plan for maintaining uninterrupted cash flow in order to keep your business afloat.

The first step in developing a business continuity plan is to fully understand all of your business processes and their exposures. This requires a detailed review of operations and documenting all cash flow-related processes and how different disasters could impact them.

You also must define all mission critical treasury activities — those that you could not live without for several days — and determine how you could work around them if they were interrupted.

Draw up a list of possible disasters and determine which ones are most likely to impact your organization. Then tailor a business continuity plan for those events. It should encompass people, infrastructure (hardware, facilities and software), and the reference materials that support each response, including call lists and instructions.

Your plan should also incorporate banking tools that support financial resilience.

 

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Remote Banking Access

Remote access to banking transactions and information is critical to business continuity. As a result, your plan should include online and mobile banking that lets you review information, initiate and approve transactions, pay and receive bills, and manage accounts anywhere you have internet access.


Automated Accounts Receivable Solutions

Cash flow is the lifeblood of your business. Your plan should also include automated solutions that enable you to move customer payments into your accounts even when U.S. mail is delayed, bank branches are closed and/or Accounts Receivable employees are working remotely.

Remote deposit, for example, empowers you to deposit checks electronically when physically transporting them to a bank branch would be problematic.

Companies that receive a lot of check payments should also consider using lockbox services. With lockbox, your customers mail their remittance payments to the bank, which deposits them to your account daily, electronically captures payment and remittance data, and sends you a ready-to-post electronic file.

Another solution that can help make you disaster-ready is online billing and payment. With Biller Express, your consumer or business customers visit a secure website where they can see their invoices and make payments. A related online payment service, Quick Pay, supports electronic collections for organizations that don’t issue invoices before receiving payments, such as property rental companies, gyms with monthly membership fees and nonprofits that accept donations.



Electronic Disbursement Capabilities

In the event of a disaster, how will you fund payroll and initiate other time-sensitive disbursements, such as trade and tax payments? Your plan should help you migrate to electronic payment options and away from inefficient check issuance.

For instance, ACH origination and wire transfer services allow you to deliver critical payments without worrying about mail delays. Same-day ACH can help when you need more flexibility in timing payroll or fast payout of insurance claims and reimbursements. And another ACH service, direct deposit of payroll, lets you electronically deposit pay into employee accounts and avoid disaster-related delays that can occur with paper checks.


In addition, a business, purchasing or virtual credit card can help you manage company expenses before, during and after a disaster.


The Real Disaster: Failing to Prepare

Don’t wait for a disaster to strike to become disaster ready. Planning and preparation can take time, but you don’t have to go it alone. Our Treasury Services specialists can assist with a wide variety of cash management solutions, and help you prepare for whatever challenges or opportunities your business may face.