Protecting Your Business Money During Times Of Banking Uncertainty

1
Protecting Your Business Money During Times Of
Banking Uncertainty
2

• Bank failures certainly arent 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 thats 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,
  youre 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 its 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 youre 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
  its 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.