As more financial activities move to the digital realm, conducting effective cash management has also gone virtual for many businesses and individuals.
Platforms now exist that facilitate sophisticated online banking, international transfers, and specialized services like private banking—all without stepping foot in a physical branch.
For those looking to take advantage of these evolving opportunities, understanding some basics of what cash management entails and how it works digitally is an important first step.
So what exactly is cash management and why should you care about managing cash flow online? Let's start with the fundamentals.
What is Cash Management?
At its core, cash management refers to effectively monitoring and controlling the inflows and outflows of money associated with a business, investment portfolio, or other financial activities.
This includes tasks like processing receipts and payments, maintaining adequate cash balances, reconciling accounts, and utilizing analytics to optimize liquidity and reduce costs.
It's essentially all the behind-the-scenes work required to keep money moving efficiently and make the most of financial resources.
For companies in particular, proper cash management is crucial for meeting operating expenses, exploiting short-term investments, maintaining strong credit, and ensuring solvency during cash flow gaps or emergencies. Individual investors and high-net-worth clients also rely on sophisticated tools and strategies to monitor diverse portfolios and take advantage of opportunities in markets worldwide.
Historically, these functions were largely siloed within separate proprietary systems at each individual bank or financial institution. But the rise of digital banking has leveled up cash management capabilities by connecting previously isolated systems through open banking APIs and standardized data exchanges.
Platforms now exist that integrate banking, accounting, payments, foreign exchange, and other core financial services into comprehensive digital ecosystems.
This has huge benefits for both businesses and their financial partners. Centralizing cash visibility, controls, and analytics in a single integrated system creates efficiencies, while open integration across institutions unleashes new innovation at both the platform and application layers.
In other words, digital cash management takes the pain out of cash flow busywork and equips companies and investors with powerful new tools to optimize working capital like never before.
How to Do Cash Management in Digital Banking?
So how does this work in practice? Let's explore some of the key ways companies can leverage digital banking features and integrate third-party applications to take their cash management online.
Online Banking and Account Integration - Most banks now offer robust commercial online banking portals that consolidate accounts, transactions, payments, reporting and more from a single sign-on dashboard. Integrating accounts from multiple banks provides a centralized view of cash positions globally.
APIs and Third-Party Connectivity - Via open banking APIs, third parties can securely connect accounting systems, ERPs, marketplace platforms, market data and more to banking services. This provides a single source of cash truth synchronized across the business's tech stack.
Automated Workflows and Integrations - Rules-based connections can automate repetitive payment and bookkeeping tasks like transactions imports, wire transfers based on invoices, balance alerts and more for set-it-and-forget-it efficiency.
Payment Integration and Collections - Options like virtual account numbers, payment links, billing/invoicing integrations and merchant payment processing through platforms like Stripe empower diverse payment collection scenarios.
Liquidity Management Tools - Analytics help spot cash flow trends and gaps while sophisticated sweeping rules and short-term investment accounts optimize idle balances for interest earning or cash flow smoothing.
Multi-Bank Account Control - Administering treasury functions across bank accounts worldwide with robust multi currency and multi-entity visibility and controls.
Fraud Protection and Controls - Robust user/device permissions, two-factor authentication, spending limits, transaction blocks and more help secure digital banking activities and money flows.
Cash Forecasting - Powerful analytics and historical views help predict cash flow needs through simulation of what-if scenarios, supporting proactive planning.
For businesses managing cash volumes or international activities online, these types of services can provide a major boost to the cash management function—all without needing to step into a traditional bank branch.
How to Open a Banking Account for Cash Management?
With digital banking opening up new possibilities, the accounts themselves have evolved as well. Specifically choosing the right deposit account tailored for cash management activities is key to maximizing the online experience.
Here are a few top account structures to consider:
Commercial Checking Account - The workhorse account for day-to-day banking, a business checking provides access to bill pay, wires, ACH, checks and more with competitive rates and minimal/no monthly fees. Preferred when liquidity needs are lower.
Interest-Bearing Checking - For higher balance businesses, interest-bearing accounts eliminate fees and pay modest interest to offset inflation on deposit values awaiting use.
Sweep Account - Combines interest-bearing savings with check-writing access by automatically "sweeping" excess balances to earn higher yields overnight before sweeping back each day. Optimal for reaping short-term gains from idle cash.
Money Market Deposit Account - Similar to sweep accounts but with higher minimum balances and transaction limits in exchange for higher interest returns on six-figure deposit piles.
Cash Management Account - Bundled packages specifically tailored for cash management combining integrated reporting, payments, investment access and advisory support in a multi-service digital solution.
Careful consideration of business model needs, existing technology integrations and cash flow patterns helps determine the best deposit structure for optimized digital cash management. Sophisticated digital-first banks excel in tailored cash solutions purpose-built for virtual workflows.
Cash Management Services for Private Banking Users
While private banking clients have specific wealth preservation and asset protection needs beyond simple deposits, sophisticated cash management tools remain important for monitoring investment and portfolio health from anywhere.
Leading digital-first institutions like Jetonbank provide comprehensive private banking and cash management through feature-rich online environments.
In addition to the benefits already discussed, premium cash management services catered for high-net-worth individuals may layer in:
- Multi-asset class portfolio analytics and performance reports
- Custom monetary simulations and goals-based planning
- On-demand adviser assistance and market consultations
- Integrated execution and accounting for alternative holdings
- Robust due diligence on counterparties and investments
- Geopolitical and macroeconomic research libraries
- Automated tax strategies and compliant reporting
- Advanced foreign exchange and hedging tools
- High-tier client experience via dedicated account managers
- Robust cybersecurity and asset insurance for wealth protection
Digital private banks now level up private client service through state-of-the-art global cash control and advanced financial tools usually only accessible to institutional investors.
With an always-on window into sophisticated cash management and expert guidance, owners can grow and preserve wealth with confidence from anywhere online.
Best Cash Management Account in Digital Banking
A pioneer in pure-play digital private banking, Jetonbank provides fully licensed banking, compliance and cash control services respected worldwide and integrated with powerful portfolio analysis capabilities through our web and mobile interfaces.
Our tiered account structures are tailored to the unique liquidity and investment activity levels of high-net-worth individuals and family offices looking for advanced holistic cash control.
Whether starting as an aspiring entrepreneur or managing eight-figure fortunes, optimizing cash flow digitally is paramount.
For both novices and experts, selecting a trusted banking partner that prioritizes online visibility, global access and dedicated service empowers frictionless cash management without compromising on controls or oversight wherever opportunity calls.
Properly leveraging digital banking tools for strategic online cash management across integrated ecosystems maximizes working capital, unlocks new efficiencies and empowers data-driven financial decision making for businesses, portfolios or clients anywhere worldwide.
Platforms like Jetonbank put sophisticated banking, payments and virtual financial control at users' fingertips to take cash flows to the next level.
