Cash Management Services in Banking

Decoding cash management services in India for efficient business operations.

Key Takeaways

Banks offer Cash Management Services to manage business cashflows.
You can set up POS and ECD terminals at merchant stores to receive money.
Businesses can receive payments through NACH, E-collections and CDMs.
Some banks also provide secure cash collection and delivery services.
You can make systematic payments via Cheque printing and bulk NEFT/RTGS through cash management services.

Running a business entails numerous parameters, including smooth operations and administration, along with the ability to generate profits. At every step, you need to have sufficient cash flows to manage your various expenses to ensure your business runs like a well-oiled machine. You need cash to pay your employees, vendors, utility bills, and more. You can manage all these expenses through Cash Management Services in India. Let us understand what it is and its types.

Cash Management Services – Meaning

Banks offer businesses a wide range of cash or treasury management services for smooth cash inflow and outflow. Cash management services include managing incoming money from customers with receivable solutions and at Point-of-Sale terminals. Services covered under cash management include paying your vendors, investors, and employees. As a business owner, you can avail of the following types of cash management services in banking.

Cash Management Services At POS Terminals

Businesses can receive payments at Point-of-Sale (POS) Terminals like merchant stores.

Mobile POS: An MPOS is a smartphone device where customers can make payments using bank cards.
ECD Terminal: These machines enable the swiping of credit and debit cards at merchant stores.
QR Codes: Businesses can use digital payment apps and set up Quick Response (QR) codes which customers can scan to make payments.

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Cash Management Services for Receivables

Businesses can receive payments from customers, banks, investors, shareholders, etc. Banks typically provide the following cash management services to businesses looking to accept payments in India.

Cash & Cheque Pick-up: Some banks offer multi-location cash pick-up, counting and verification facilities, along with local and outstation cheque collection services.
National Automated Clearing House (NACH): NACH is a National Payments Corporation of India (NPCI)-backed service. It allows a business to debit low-value transactions of larger volumes set up at uniform intervals, for example, Mutual Fund SIPs paid by investors.
E-Collections: Through e-collection, your customers can get your business’ payment details and make recurring inward payments via Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT).
Cash Deposit Machines (CDM): You can request your bank to set up customisable CDMs in your business premises enabling high-value cash collection.

Cash Management Services for Payables

Running a business also entails paying your vendors and stakeholders. Payable cash management services in banking are as follows:

Cheque Printing: You can issue bulk cheques at the bank or your business premises. The digital signature facility allows vendors to receive payments instantly.
Bulk Fund Transfer: Through bulk payments, you can pay your employees and set up multiple debits for vendors using NEFT and RTGS.
Cash Delivery: Banks also offer safe delivery of cash to your doorsteps as well as to authorised recipients.

Final Note

The key to running a business smoothly is systematically managing it. As a business owner, you can approach a bank to manage your business operations pertaining to cash flows on a large scale. Banks can help streamline your cashflows through effective cash management services.

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*Disclaimer: This article is for information purposes only. We recommend you get in touch with your income tax advisor or CA for expert advice.