Protecting Your Business Money During Times Of Banking Uncertainty

1. Protecting Your Business Money During Times Of Banking Uncertainty

2. Bank failures certainly aren’t a common occurrence, but the reality is that they can happen – as has been the case with Silicon Valley Bank and its recent closure – and when they do, they can prove devastating for everyone concerned. Often happening swiftly and without any warning at all, business owners may be left high and dry when a bank does fail. Fortunately, however, there are some steps you can take to help protect your business and its cash during times of uncertainty in the banking world:

3. Treasury and cash management While not the same things, both forms of money management share the same concept, and can be used to help businesses balance their cashflow more effectively, even during periods of banking uncertainty. Treasury management –involving the management of a businesses day-to-day cashflow and other bigger financial decisions, treasury management helps business owners gain a clearer insight into the liquidity of their company. Additionally, it can help a business gain credit lines and maintain them, while also enabling you to make the most of returns on your investments, among many others. ●

4. Some businesses use treasury management to help them set up strategies for using and growing their cash long-term. Cash management – this involves the process used to maintain control over a businesses daily flow of cash, so that you always have some available, should you need it. In some ways, it can be thought of as a subsidiary of the bigger concept of treasury management. ●

5. By adopting an approach that’s forward-thinking, businesses operating in industries that put them at a cash depletion risk, can manage and balance their cash flow more effectively. Then, it becomes simpler to replenish depleted funds and still be able to make the most of opportunities that present themselves, even during times of financial uncertainty.

6. Evaluating the existing threat and your businesses potential exposure By understanding just how exposed you might be in the event of a particular bank failing, you can give yourself the best chance of protecting your money and making decisions that will help you the most moving forward. If all of your cash is with one particular bank, then should they fail, you’re almost certainly going to be up a certain creek without a paddle. Knowing your risk surface profile is essential in times of banking uncertainty, and by understanding exactly where all of your money is, what types of accounts it’s in and how much money is involved, are all things that can help you minimize the risk.

7. How you can keep your business safe from bank failures Firstly, be aware of the $250,000 cap per depositor, per financial institution, per ownership category, insured by the FDIC in the event of a bank failure. If you’re concerned about losing a figure higher than that sum, then it might be worth considering investing with a bank that forms part of the IntraFi network. Such banks offer something called an Insured Cash Sweep along with a service known as a Certificate of Deposit Account Registry. What this means is that your cash is distributed throughout a number of different banks within the IntraFi network, and prevents you from having more than $250,000 in one place, at any one time. Should a bank fail, you can still access your financial assets, and the risk of more than bank failing at the same time, is significantly low.

8. Following on from this advice, keeping your money in more than one bank account is generally recommended, and it pays to have an emergency fund in a bank separate from one in which you hold cash intended for daily use. You may find that a financial advisor or accountant can offer you even more advice, but it’s good to know that even if a bank in which you hold a business account does fail, there are things you can do to minimize its impact on your company.

9. At Heyer Inc, we proactively assist our individual and small business clients in meeting their goals. Our key area of focus is ensuring that our clients remain compliant with federal and state tax laws by providing them with high quality accounting and tax services Miami. If you are looking for an individual accountant in Miami, heyer inc would be a right option.