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5 strategies to maximize cash flow for your small business

As a small business owner, you know how important your cash flow is. Efficient money management isn't just about making sales and paying bills; it's about strategically optimizing your cash flow so your business can grow, thrive and stay prepared for unexpected challenges. Let's dive into five strategies to improve the 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.'