5 strategies to maximize cash flow for your small business
1. Automate your payables
Manual payments take time, and missing deadlines can lead to late fees or damaged vendor relationships. In fact, 'one of the most common cash flow challenges we see small businesses face today is waiting on customer payments,' says Lauren Kvamme, vice president, Treasury Management Office at MidWestOne Bank. Using payment solutions that automate your processes helps you save time and money by:
Paying vendors and suppliers automatically on a set schedule
Reducing the risk of fraud with secure electronic payments
Avoiding late fees by ensuring bills are paid on time
Treasury management solutions like ACH Services and wire transfers help automate your processes and reduce your risk of fraudulent activity.
Pro tip: Set up recurring ACH payments for fixed expenses (like rent, utilities and supplier invoices) so you never miss a due date.
2. Use a lockbox service
Waiting for customer payments to clear can slow down your cash flow. With lockbox services, customer payments are sent directly to a dedicated P.O. box managed by your bank, where they are quickly processed and deposited. A lockbox service can:
Reduce mail delays by streamlining payment processing
Speed up deposits, improving cash availability
Automate check handling, reducing manual labor
'The biggest advantage of this service for your business is that the bank handles the check deposits for you, so you get your money faster without leaving your office,' Kvamme explains.
Real-world scenario: If you run a medical office or property management business that receives a lot of checks, a lockbox service can cut your processing time in half and free up your team for other tasks.
3. Use merchant services for payment processing
If you're not accepting digital payments, you're leaving money on the table. Utilizing tools like credit card processing, mobile payments and e-commerce solutions to help you get paid faster and reduce friction for your customers.
Accept credit/debit cards, online payments and mobile transactions
Speed up cash flow with faster deposits into your business account
Improve customer experience by offering multiple payment options
Merchant Services offer an all-in-one point-of-sale tool that can help transform your business with payment processing and business management solutions. Kvamme recommends looking for a provider with low fees, strong customer support and easy setup so you can get started quickly.
Pro tip: Look for merchant services that offer same-day or next-day funding to improve cash flow even more.
4. Centralize your accounts
If you have multiple business accounts or locations, cash concentration services help sweep funds into a central account, giving you better visibility and control over your money.
Maximizes liquidity by consolidating funds in one place
Reduces idle cash, ensuring money is used efficiently
Improves forecasting, making budgeting easier
'Sweep accounts automatically move extra cash into savings so it's earning interest instead of sitting unused, and you always know exactly how much cash you have,' Kvamme advises.
Who this helps: If you run multiple business locations, keeping cash spread across several accounts can make it hard to manage. A sweep account helps centralize funds, so you always know where your money is.
5. Protect your business from fraud
Fraud is a growing concern for small businesses, and one scam can drain your accounts before you even realize what happened. Help protect your business from risk with tools that monitor your payables for you and give you instant access to your accounts. Small businesses can benefit from:
Positive pay. Matches check details against your list of issued checks to prevent fraud.
Matches check details against your list of issued checks to prevent fraud. ACH fraud filters. Lets you control which businesses can debit your account.
Lets you control which businesses can debit your account. Multi-factor authentication. Adds an extra layer of security to online banking transactions.
According to Kvamme, a big mistake many small businesses make is 'not checking their bank account often enough.' She adds, 'Fraud can happen in small amounts over time.'
She also recommends dual control: 'Always have two people approve payments. It's one of the best ways to prevent fraud, whether it's from a scam or an internal mistake.'
Real-world solutions: MidWestOne is empowering small business owners like you to take control of their finances with our Small Business Bundle — designed to protect your business from risk.
Start optimizing your cash flow today
A strong cash flow strategy isn't just about making money — it's about managing it wisely. By incorporating Treasury Management products to assist with cashflow management, you can get paid faster, reduce risk and ensure your business stays financially strong.
'Always know how much cash you have today and what's coming in next week,' Kvamme advises. 'Cash flow problems start when businesses assume money will arrive on time.'
For more information on how MidWestOne Bank is helping businesses deliver on their vision and goals, please visit MidWestOne. MidWestOne Bank, Member FDIC.
MidWestOne Bank is a $6.2 billion bank serving customers across Iowa, Minnesota, Wisconsin and Colorado. For more than 90 years, the bank has provided local service and expertise to customers across 56 banking centers. MidWestOne Bank provides diversified financial solutions including wealth management, commercial, retail and mortgage banking. MidWestOne Financial Group, Inc., the parent company of MidWestOne Bank, trades on the Nasdaq Global Select Market under the symbol 'MOFG.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
3 hours ago
- Yahoo
Strike CEO's New Venture Takes Aim at Bitcoin's Biggest Corporate Holders With Revolutionary 'Bitcoin Per Share' Strategy
Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. Jack Mallers' Twenty One Capital plans to dethrone MicroStrategy and Marathon with $5 billion Bitcoin treasury—but the real innovation might be how they measure success Jack Mallers, the Bitcoin maximalist behind Strike—a digital payments app that uses the Lightning Network to enable instant, low-cost Bitcoin and dollar transactions—and the driving force that helped El Salvador adopt Bitcoin as legal tender, is making his boldest move yet. His new venture, Twenty One Capital, has accumulated over 43,500 Bitcoin worth more than $5 billion and is positioning itself to become the world's largest corporate Bitcoin holder—surpassing current leaders MicroStrategy (NASDAQ:MSTR) and MARA Holdings (NASDAQ:MARA). Don't Miss: The same firms that backed Uber, Venmo and eBay are investing in this pre-IPO company disrupting a $1.8T market — — no wallets, just price speculation and free paper trading to practice different strategies. But what sets Twenty One apart isn't just the size of its Bitcoin war chest. In a recent Bloomberg Television interview, Mallers revealed a fundamentally different approach to measuring corporate performance that could reshape how Bitcoin-native companies think about shareholder value. The 'Bitcoin Per Share' Revolution While traditional companies obsess over earnings per share, Twenty One has introduced what Mallers calls 'Bitcoin per share' as their primary performance metric. The reasoning is both simple and profound: measuring success in dollars is meaningless when fiat currencies are constantly debased. 'Everything goes up in dollar terms,' Mallers told Bloomberg. 'The objective is for shareholders to get wealthier in Bitcoin terms by growing the Bitcoin per share.' This isn't just accounting innovation—it's a philosophical shift that treats Bitcoin as the ultimate unit of account. Twenty One expects to complete its public listing in the third quarter following Securities and Exchange Commission review, with over $5 billion in Bitcoin at launch, giving investors direct exposure to this new performance framework. Trending: If there was a new fund backed by Jeff Bezos offering a ? The Scarcity Advantage Mallers' confidence in Bitcoin's trajectory stems from what he calls 'definitive scarcity.' Unlike traditional commodities where increased demand can stimulate additional supply, Bitcoin's fixed 21 million coin limit means new buyers must compete for existing holdings. 'If you want more bitcoin, you don't go to the bitcoin factory. You have to go up in price,' Mallers told Bloomberg, predicting Bitcoin could reach $150,000 as institutional and sovereign buyers compete for limited supply. This supply constraint is already creating upward pressure. MicroStrategy holds the largest corporate Bitcoin treasury, while MARA ranks second with over 46,000 BTC. Twenty One's goal to surpass both reflects Mallers' belief that corporate adoption is still in its infancy. Beyond Treasury: The Dual Strategy Twenty One isn't just another Bitcoin treasury play. With backing from heavyweights including Tether and SoftBank on its board, the company plans to build Bitcoin products, technology, and tools—essentially competing with both treasury companies like MicroStrategy and product-focused firms like Coinbase Global (NASDAQ:COIN). 'Why not both?' appears to be Mallers' philosophy. His track record supports this ambition: Strike, his previous company, became a major Bitcoin financial services platform, and his involvement with El Salvador's Bitcoin adoption demonstrated his ability to execute complex, high-stakes 'Maxi' Advantage Perhaps most telling is Twenty One's unwavering focus on Bitcoin exclusively. Mallers embraces the 'Bitcoin maximalist' label, viewing other cryptocurrencies as inferior alternatives to what he calls 'pristine money.' His rationale centers on Bitcoin's role as a store of value in a world where traditional assets are constantly diluted. 'I've created value and I want to keep it,' he summarizes as Bitcoin's core use case. 'Bitcoin allows you to abstract your effort, time, and energy, and take it with you tomorrow,' he told Bloomberg. This single-asset focus contrasts sharply with diversified crypto strategies, but it also provides clarity of purpose that resonates with institutional investors seeking pure-play Bitcoin exposure. Market Implications Twenty One's approach could accelerate corporate Bitcoin adoption by providing a clearer framework for measuring success. With an unrealized gain of over $1.3 billion already accumulated, the company serves as a real-time case study in Bitcoin treasury management. For investors, Twenty One represents a new category: Bitcoin-native companies that measure success in Bitcoin terms rather than fiat. This could appeal to those who believe traditional accounting methods undervalue Bitcoin-holding companies. The broader market implications are significant. As more companies adopt Bitcoin treasuries and measure performance in Bitcoin per share, it could create additional demand pressure on Bitcoin's fixed supply—potentially validating Mallers' bullish price predictions. Twenty One's public debut will test whether investors are ready for this new paradigm. If successful, it could mark the beginning of a fundamental shift in how we measure corporate value in an increasingly Bitcoin-denominated world. Read Next: 'Scrolling To UBI' — Deloitte's #1 fastest-growing software company allows users to earn money on their phones. Image: Shutterstock This article Strike CEO's New Venture Takes Aim at Bitcoin's Biggest Corporate Holders With Revolutionary 'Bitcoin Per Share' Strategy originally appeared on Sign in to access your portfolio
Forbes
6 hours ago
- Forbes
The More Trump Bashes Powell, The More This 15% Dividend Wins
Could the Fed cut rates—and actually cause interest rates to rise? Absolutely. In fact, it's a setup I see as very much in play. Today we're going to talk about a 15%-yielding (!) stock that's well-positioned to benefit. Powell Vs. the 10-Year, Round 2 How would this 'rate split' come about? To get at that, we need to bear in mind that the Fed only controls the effective Federal funds rate. That's the 'short' end of the yield curve—or the rate at which financial institutions lend to each other. Meantime, the 'long' end—pacesetter for consumer and business loans (including mortgages—more on those shortly) is tied to the 10-year Treasury yield—and has a mind of its own. This wouldn't be the first time the 10-year has called out Jay Powell. Last September, the Fed cut rates for the first time since 2020, after hiking to counter the 2022 inflation spike. Powell Gives the 'All-Clear.' Bond Market Says 'Not So Fast' The bond market was having none of it. Even as the Fed cut, 10-year Treasury rates jumped, sending Powell a clear message: Slow your roll. When the Fed cut rates, it ironically sparked a rally in long yields. Once Powell backed off, leaving the Fed's rate where it is now, the 10-year yield steadied, too. History doesn't repeat, as the saying goes, but it does rhyme. As I write this, inflation is still above target. But even so, July's CPI report came in below expectations. That's another point in favor of a lower Fed rate—and a higher 10-year Treasury rate. And yes, producer prices did jump in July, and tariffs likely played a role. But as we've written before, recent studies have found that tariffs are not inflationary, because rising prices depend on a hot economy. A trade war brings in the opposite, since tariffs are a short-term headwind on growth. And don't forget that Powell's term ends in nine months, and whoever the administration appoints is likely to cut quickly—inflation or no. Mortgage REITs Borrow 'Short' and Lend 'Long' In my August 5 article, we looked at business development companies (BDCs) as contrarian plays on this 'rate split.' But there are other options, like mortgage REITs (mREITs). When most people think of REITs, they think of equity REITs—landlords of buildings, such as warehouses and apartments. mREITs deal in paper—buying mortgage loans and collecting the interest. They make money by borrowing at short-term rates to buy mortgages that pay income tied to long-term rates. The profit is in the difference, so management always wants short-term rates to be lower than long-term ones (which they typically are). Moreover, the value of these loans gets a nice bump when short-term rates decline and long-term rates hold steady or, better yet, move lower. That's because lower rates mean mREITs' mortgages—issued when rates were higher—yield more than newly issued ones, so they're worth more. That, in a nutshell, is the setup we're looking at now. Look at this chart of 30-year mortgage rates. You can see they're drifting lower now, but not quickly enough to encourage a wave of refinancing or prepayments. The sweet spot for mREITs! This comes at a time when mREITs, as measured by the iShares Mortgage Real Estate ETF (REM), in purple below, have lagged the REIT pack, as measured by the Vanguard Real Estate Index Fund (VNQ), in orange. However, as you can also see toward the left of the chart above, mREITs have outperformed for long stretches, such as during the low-rate 2010s. In the coming months, with the gap between mREITs and REITs as a whole still wide and the Fed set to lower rates, we've got a nice setup for another run of mREIT outperformance. To add an extra layer of safety, we're going to focus on an mREIT dealing in 'agency' mortgage-backed securities (MBS)—those guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae. A 15% Dividend About to Get 'Backup' From the Fed That would be AGNC Investment Corp. (AGNC), which yields 15% now. It buys MBS (often through repurchase agreements) and profits off the spread between its loan cost and the yield these assets deliver. Its profits are easy to spot: In the second quarter, its average asset yield was 4.87%, while its average repo cost was 4.44%, down slightly from Q1. Falling short-term rates would cut its repo costs almost immediately, further widening this spread (and boosting AGNC's profits). The mREIT did post a modest loss in Q2, but we love the fact that management added to its assets at attractive prices as a result of the April 'tariff terror': Now let's talk about that 15% dividend. As you can see below, management cut the payout (in purple) when the Fed hiked rates (in orange) through to the end of 2019 and into the COVID lockdown period. We'd expect that, as rising rates boosted repo costs and COVID uncertainty—especially in the early days—put the real estate market on ice. But look to the right and you'll see that AGNC did hold the line on the dividend as the Fed drove rates higher in response to the inflation surge of 2022/2023. That's a great sign—and shows the payout likely got an assist from the hedging programs AGNC uses to cut its rate risk: Now that the Fed looks to be headed back into cutting mode, the dividend should get some extra backup on lower borrowing costs. Going forward, analysts have the mREIT pegged for $1.60 per share in earnings for this fiscal year. The monthly dividend—$0.12 per month for a total of $1.44 annually—accounts for 90% of that. That is a bit high, but bear in mind that a falling Fed funds rate would add to profits and therefore reduce that number. It may even open the door to a dividend increase, especially if 10-year Treasury rates hold steady or gradually move lower, as I expect. Finally, as I write this, AGNC trades at 1.1-times book value and six times forward earnings. A wider gap between the Fed rate and 10-year Treasury yield would boost both numbers—putting a lift under the share price as it does. Brett Owens is Chief Investment Strategist for Contrarian Outlook. For more great income ideas, get your free copy his latest special report: How to Live off Huge Monthly Dividends (up to 8.7%) — Practically Forever. Disclosure: none
Bloomberg
7 hours ago
- Bloomberg
UK Debt Leads Bond Rally as Traders Cast Aside Inflation Fears
Gilts broke out of a week-long slide on Wednesday, surging despite a hot inflation number that threatens to slow the pace of interest rate cuts by the Bank of England. The yield on UK 10-year debt fell five basis points to 4.69%, snapping a four-day advance that had lifted government borrowing costs to the highest since May. Yields are on track for the biggest decline in a month.
