A robust cash management system is essential, as businesses need to make regular payments for salaries, rent and other utilities. Moreover, in scenarios where there is a time lag between production and sales, having sufficient cash flow is crucial for covering operational expenses. Linking your corporate banking account to Cash Management Services (CMS) will help you strengthen your business operations and reduce costs. Its benefits include:
1. Receivables management
This includes services such as cash or cheque collection services across the country or automated collections using NACH. For instance, Axis Bank's Cash Management Services boasts of over 900 locations which ensures that your cheques are collected conveniently over this network. These services help your business collect payments from customers quickly and efficiently.
2. Payables management
This involves managing outgoing payments, such as salaries, vendor payments and tax payments. You can use services like electronic fund transfer, NACH payments and automated bill payments to streamline your payables using the CMS.
3. Liquidity management
CMS will help your business manage cash positions by providing tools for forecasting cash flow, managing short-term investments and optimising the use of available funds. This can include sweep accounts, which automatically transfer excess funds into investment accounts or use them to pay debt.
4. Customised MIS reporting
One of the major cash management service benefits is the provision of MIS in a customised format for better planning. For example, you can generate reports on cash flow trends, receivables ageing and payment histories, enabling you to make better decisions. The ability to access real-time financial data and analytics helps businesses stay agile and responsive to changing market conditions. This ensures they can capitalise on opportunities and mitigate risks effectively.
5. Cost savings
By automating various financial processes, CMS helps businesses save on operational costs. Manual processes often require significant labour and administrative expenses. Electronic transactions are generally less expensive than paper-based ones, reducing costs related to printing, postage and paper storage. For small and medium-sized enterprises (SMEs), these cost savings can be substantial, freeing up resources to invest in growth and expansion.
Also Read: Retail Banking vs Corporate Banking: Exploring the differences
Conclusion
In today’s era of online banking, it's essential to explore the benefits of Cash Management Services. If you run a multi-channel business with numerous vendors and frequently conduct transactions via demand drafts or cheques, then CMS will streamline your financial operations. Advantages of CMS include automation of collections and payments, timely transactions and no late payment concerns. Additionally, a customised MIS provides real-time financial tracking, aiding in effective financial planning and business growth.
Axis Bank's CMS is available across 900+ locations in India. It has lower interest costs, liquidity, a centralised service desk, the option of web CMS and a comprehensive MIS at your service. Elevate your business banking account with Axis Bank CMS today!
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.
