Cash Management Products Flashcards
What is reporting, in regard to a cash management product?
Balance Reporting – Secure, internet-based reporting of account and transaction information at a customer’s lead bank
What is Zero Balance Accounting?
Designed for customers who fund decentralized accounts from a central main account
What is Zero Balance Accounting?
As debits are charged to ZBAs, funds automatically transfer from the master account to cover the debit and bring the sub-account balance to zero
May also be referred to as sweep accounts
What is Receivable Processing:
Lockbox
What is a Lockbox?
Cash management service offered by banks to customers to expedite receivables processing
Bank sets up a post office box, opens mail, and deposits checks received on behalf of customers
What types of LockBox products are there?
Retail Lockbox – Companies, such as utilities, that receive a high volume of payments via checks in the mail
May include a check and a remit advice/stub which can be processed/captured in an automated process
Wholesale Lockbox - Companies with small numbers of payments, sometimes with detailed requirements for processing, such as a doctor’s or dentist’s office - supports non-standard forms
What is the primary purpose of Account Reconciliation Products? (ARP)
Goal of product: Increase amount of information and decrease amount of work in company’s accounting
What is Full Reconciliation:
Customer provides the banks the data on the checks issued
Bank matches that data against the checks that cleared their account
Customer receives reconciliation reports including checks paid, outstanding items and exceptions
What is Partial Reconciliation?
Customer receives a report of the items paid sorted usually by the customer’s instructions
What is Deposit Reconciliation?
Allows customer to maintain one account but have deposits from multiple business locations
What is Positive Pay?
Service where the bank automatically matches each check presented against amount and check number on listing of checks issued
Can be especially useful as fraud deterrents such as check alterations; includes:
What are the different types of Positive Pay products offered?
Payee Positive Pay: Service that matches the payee name from the issue file to the payee name on the check
Benefits: Bank reviews and flags checks that may be fraudulent (not on the listing of checks issued) and alerts the customer for decision to pay/not pay
Reverse Positive Pay: Service where bank sends information on checks to be posted to the customer and the customer compares each amount and check number to its listing of checks issued
Benefits: Customer can monitor and review checks and tell the bank whether to pay or reject any checks; some products may allow customer to adjust/correct check amount if value was misread
What is Payee Positive Pay?
Service that matches the payee name from the issue file to the payee name on the check
What is Reverse Positive Pay:?
Service where bank sends information on checks to be posted to the customer and the customer compares each amount and check number to its listing of checks issued
