In New England, we're accustomed to planning for severe winter storms that require businesses to close early, open late or have employees work from home for a few days. Many organizations have daily cash management contingency plans that involve only funding critical transactions and holding deposits for the next business day in the event of a storm closure.
However, businesses often do not have contingency plans that address the needs for continuing remote operations for weeks at a time. With the spread of coronavirus across the globe, we've put together strategies that businesses can use to remotely conduct treasury management needs.
Your organization likely already uses digital banking to view accounts, transfer funds and make payments. There are a few other steps to consider in times of crisis.
The person who serves as your digital banking administrator should review user rights to make sure critical payments can be made remotely and still meet standards for controls. Confirm that there are enough members of your team who can enter and release payments, in the event that someone is ill, and a coworker needs to provide back-up.
Make sure your digital banking users are bringing their security tokens and laptops home with them at night, so they can log in and perform secure transactions.
So that you can make critical payments electronically, it may be wise to set up wire and ACH capabilities in digital banking if you do not already have them in place. Employees who handle payments should be trained on how payment instructions will be communicated and what the approval process will be for sending wires and ACH payments.
Make sure your cash management team has home and cell phone numbers for everyone involved in transactions, as payment requests should not occur entirely by email. This information should also be shared with your bank, and it should include members of your team who receive positive pay exceptions.
Unfortunately, fraud may actually increase during a pandemic as fraudsters try to take advantage of slips in standard controls due to employees working remotely. Fraudsters often look to create a false sense of urgency for a payment to be made, and this may sound more convincing during a pandemic. Make sure your team is on the lookout for fraud, and set up fraud preventions services like positive pay and ACH blocks and filters, so you are notified of unauthorized payments.
Urge employees to sign up for direct deposit, so that they can be paid electronically and have access to their funds.
You'll want to make sure your business can make and receive payments electronically. Here are some tips to prepare your business.
Have wire and ACH payment instructions ready to share with customers who may currently pay by check. You should indicate what information needs to be included, so the payment can be applied correctly and reconciled.
Use remote deposit capture to scan and deposit checks, so you can make deposits without going to the bank.
It is widely known that cash and coin can carry germs. If your employees are handling cash, frequent hand washing and access to hand sanitizer are key.
In the event that incoming payments are delayed, it may be wise to have a line of credit in place so you can make payroll and other critical payments.
TEST YOUR REMOTE CASH MANAGEMENT CAPABILITIES
After you've created a process for how your business will manage cash remotely, be sure to run tests, identify gaps and document your procedures. As always, talk with your banking team about your cash management contingency plans so that they can support and advise you throughout the process.
For further insights on how treasury can continue to function in times of crisis, download AFP’s Guide to Business Continuity Planning, underwritten by Kyriba.