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Umpqua Bank Insights

April 27, 2020 | Commercial

How to maximize working capital during the COVID-19 crisis

Maintaining cash flow

Mike Walford, SVP Working Capital Consultant, Global Payments & Deposits

COVID-19 has turned all our worlds upside down. I know many of you are working harder than ever just to maintain critical business operations.

No one can predict when or how this pandemic will end, but in times like these I think the strength of our relationships are what will get us through. And as you know, for a business those relationships are supported by cash flow.

I’ve heard from many of our customers about their current challenges with maintaining working capital in this environment. This can feel like a strange time to take a step back and evaluate your operations and how you’re collecting funds from sales or sending money to suppliers, but the fact is your relationships and the continued health of your business will depend on your ability to get the money you’re owed into your accounts and to keep essential suppliers happy and delivering what you need to keep your business moving forward.

Here at Umpqua, relationships matter a lot to us too. That’s why we have treasury management consultants who can help you evaluate your payables and receivables processes and collaborate with you on developing operational improvements. Their suggestions could not only make it easier to conduct business while many of us are working remotely, but can also deliver efficiency gains and cost savings that will be beneficial even after life returns to normal.

Let’s take a look at some of the ways we’ve helped clients with individualized guidance since COVID-19 changed all of our lives.

 

Settling invoices

We’ve talked to a lot of businesses that have had to quickly shift their administrative or accounting staff to working remotely. Recently, one of our treasury management consultants met with a CPA firm that receives between 1,500 and 2,000 invoices each month in the mail and via email, then routes those invoices through three or more levels of approval. During that conversation, our consultant discovered that the firm’s remote work environment was compatible with Umpqua Integrated Payments, an automated invoice solution that enables accounting staff to electronically intake invoices, manage multiple approvals, and make payments across each payment type—check, card and ACH. From this collaboration, the firm was able to get its accounting team set up quickly to work remotely without significant disruption.

 

Electronic payment

It’s often surprising what systems are stressed or cut off entirely from your business during a crisis. Many companies send a payables file via their enterprise resource planning software directly to a printer to produce individual checks. We’re hearing from some of our clients that now that they’re required to work remotely, they don’t have access to their usual check printing devices.

One treasury management consultant took the opportunity to check in with a customer about how the company’s finance team was handling this difficult time. During that conversation, our consultant learned that the customer was having trouble issuing checks. The consultant listened carefully to the situation and worked with the client on an automated payables strategy that took advantage of digital payments and did not rely on paper checks.

 

Making deposits

All of our stores are practicing social distancing while we work with communities to limit interactions that can spread COVID-19. As a result, many businesses, especially those with limited resources and time, have had to find new ways to deposit money.

For example, a local beverage distributor we work with is still making deliveries and collecting funds from sales during the COVID-19 pandemic. One of our consultants recently helped the customer think about how to automate collections and receivables. After talking it through, our consultant was able to give the distributor a clearer view of the company’s current process and then recommend new solutions that included implementing remote check deposit and expanding the receipt of ACH.

Another option for receiving payments is a lockbox service, which allows customers to route all payments to a bank-owned and -operated collection location where the payments are processed and routed to the business’s accounts. Some businesses have also talked to our consultants about the pros and cons of accepting credit cards for payment.

 

We’re here for you

We have a lot of good people with years of experience helping businesses get creative during difficult times. The Working Capital Assessment offered by our treasury management consultants can help you see the opportunity to streamline your processes, even in the middle of this crisis.

Our approach is simple. We take the time to listen to you and to understand your cash flow processes. Once we have a clearer view of your unique situation, our consultants analyze the facts and recommend a suite of options that deliver real value for your business. We don’t push Umpqua Bank products. We just want to help you find what works best for you.

 

Talk to a treasury management consultant

We’d love to hear about how you’re adjusting to the new realities of COVID-19. And we’re always happy to help you sort out what your business needs right now. Send me an email at mikewalford@umpquabank.com or visit https://www.umpquabank.com/commercial/treasury-management/ to learn more about treasury management consulting services and our Working Capital Assessment.

Contact Mike Walford, SVP Working Capital Consultant, Global Payments & Deposits

(503) 936-6024 

mikewalford@umpquabank.com

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