What is Your Cash Management IQ?

What is Your Cash Management IQ?

Written By: Darren Hunt

from May 4, 2015

You have likely heard the saying “Cash is King”. In this article we will discuss a number of ways Microsoft Dynamics GP helps you better manage cash flow.

Two options Microsoft Dynamics GP offers for managing cash are bank reconciliation (sometimes referred to as “basic” bank rec) and electronic bank reconciliation.  The primary difference between the two is the electronic version streamlines the reconciliation process by automatically matching Microsoft Dynamics GP transactions to those cleared by the bank.

One of the best examples where electronic bank reconciliation automates a repetitive process and saves time is payables checks. Simply put: All records where the check number and check amount match between Microsoft Dynamics GP and the bank statement are immediately marked as cleared the moment a user opens the main bank reconciliation matching window. Voilà! Now the user is left to only manage exceptions rather than ticking box after box after box.

To wrap up this section, let me leave you with a challenge or two.

Number 1

If you are currently using the “basic” bank rec module (or worse yet, managing this process in Microsoft Excel) seriously consider stepping up to electronic bank reconciliation. The time required to install and implement the module is typically less than the time spent manually reconciling each month’s bank statement. (Hint: Ask your bank for a BAI-formatted file, and you will be up and running with electronic bank reconciliation in significantly less time.)

Number 2

For those of you already reaping the benefits of electronic reconcile, how frequently are you using the module? I suspect the majority of you would answer monthly. Which is great, but did you know there is nothing in Microsoft Dynamics GP preventing you from reconciling more frequently? In fact, I would challenge you to start reconciling every bank account weekly or, dare I say, daily. Why wait until the end of the month to find out you have a cash problem? Ask yourself this question: If I were to “borrow” $100 from your wallet without asking, would you rather find out now, or possibly days, weeks, or months down the road? Just a thought!

Nolan ABR

For more complex reconciliations, consider Advanced Bank Reconciliation (ABR) from Nolan Business Solutions (www.nolanbusinesssolutions.com). With its user-friendly, automated matching process, ABR outshines both Microsoft Dynamics GP bank rec versions. Where Microsoft Dynamics GP’s matching rules are fixed, ABR’s user-definable, flexible rules enable matching on more than just transaction date and amount. Furthermore, grouping “rules” automatically aggregate multiple Microsoft Dynamics GP transactions to match lump-sum bank statement records, making reconciliation an easier task.

Safe Pay

Another aspect of cash management pertains to mitigating fraud. Most banks offer a service known as positive pay. The idea behind positive pay is to provide your bank with key payment information, such as the check number, date, and amount, when paper checks are issued. Banks then use this information to approve or deny the clearing of funds. For example, suppose a check amount was fraudulently modified to display an amount greater than the original check amount. In this scenario, the bank’s positive pay system would recognize the disparity in check amounts and not release the funds. The Safe Pay module available in Microsoft Dynamics GP gives users a tool to export the positive pay file in the exact format specified by the issuing bank.

EFT

Next up on our discussion of cash management are a few digital payment tools. Microsoft Dynamics GP offers two electronic funds transfer (EFT) modules known as EFT for receivables and EFT for payables. These modules leverage the automated clearing house (ACH) network used by banks to manage the movement of money between financial institutions. Instead of using paper to carry necessary transaction information, such as with checks, ACH transactions are transmitted electronically, allowing for faster processing times. ACH transactions typically settle within one to two business days. Similar to Safe Pay, the EFT modules require you to export a file from Microsoft Dynamics GP matching the format specified by the bank and the ACH network.

Viewpost

While the EFT modules remove some of the pain managing cash receipt and payment processing, they still fall short in certain key areas. Two of the most significant gaps are the decoupling of the payment and remittance data, and maintaining your trading partners’ banking information. To bridge this gap, Integrated Business Group has partnered with Viewpost to take the busywork out of cash management.

Simply stated, the Viewpost network is a secure, cloud-based solution where businesses efficiently exchange electronic invoices and payments with their trading partners from anywhere at any time without losing valuable remittance data. No fees are charged for you or your trading partners to join Viewpost.

Viewpost also securely stores each trading partner’s bank account information, eliminating the need to initially set up and then maintain one another’s banking information over time. Payments are processed either electronically or as paper checks. The electronic option offers the most benefits, primarily due to the speed in which funds transfer, as well as the security enhancement that comes with the elimination of paper which is subject to alteration. However, if you want to start off simple, Viewpost will print, stuff, and mail payments for you similar to existing bill-payment solutions.

Viewpost never charges a fee to: create, send and track invoices; receive, enter and manage bills; or receive electronic deposits. You simply pay $0.50 or $0.75 per payment of any amount sent electronically or as a paper check, respectively. Even the online dashboard where you can manage your cash flow and view the status of invoices is free. And best of all, Viewpost syncs all data directly to Microsoft Dynamics GP for free.

Visit https://www.viewpost.com/ibg for more information about Viewpost and its offerings.