Still driving checks to the branch? Signs your business needs treasury management

If your team spends hours moving money by hand, you are ready

A business usually needs treasury management when moving money has become a job in itself: someone drives deposits to the branch every week, vendors and payroll are paid by paper check or keyed in one at a time, reconciling the accounts takes days, or the company has had a fraud scare. Treasury services replace those manual steps with electronic deposits, ACH payments, fraud screening and better reporting. You do not need to be large; you need enough volume that the manual way is costing time, money or control.

I manage a portfolio of business deposit relationships at Frost Bank, and getting treasury services right is often one of the first practical changes for a company that moves its accounts. It rarely gets requested by name. Owners describe the symptoms instead, and the symptoms are remarkably consistent.

What the term actually covers

Treasury management is a banking term for the services that help a business collect money, pay money, protect its accounts and see where its cash is. Banks package and name these differently, but most offerings fall into the same four groups. Frost, for example, organizes its treasury services under payments, receivables, fraud prevention and information reporting, and other banks use similar categories.

The useful way to think about it is not as a product but as a question: where in the company does money still move by hand, and what does that cost? Every manual step is staff time, a chance for error and, often, a fee. Treasury services are simply the bank's tools for removing those steps. Which ones you need depends entirely on how your customers pay you and how you pay everyone else, which is why a good setup always starts with a conversation about the business rather than a menu.

• Receivables: remote deposit by scanner or phone, lockbox processing, vault and cash services
• Payments: ACH origination for vendors and payroll, bill pay, tax payment services, wires
• Fraud prevention: positive pay for checks and ACH, payment approvals, alerts
• Information reporting: daily balance and transaction reports, account reconciliation

Sign one: deposits are a weekly errand

If someone in your office leaves every week, or every day, to carry checks to a branch, that is the clearest sign of all. Remote deposit capture lets you scan checks at your desk or photograph them with a phone and have them credited without the trip. For companies that receive a large volume of mailed payments, a lockbox service has those payments sent directly to the bank, which processes them and reports the detail to you.

The time saved is real, but so is the control. Checks that sit in a drawer waiting for the next branch run are checks that can be lost or stolen, and money that arrives later than it should. Faster deposits also mean the cash shows up sooner on the days when payroll and supplier bills are due.

Sign two: you still pay vendors and staff by paper check

Writing, signing, stuffing and mailing checks takes staff time, costs postage and, on many business accounts, costs a per-item fee. It also creates risk. FinCEN reported that financial institutions filed more than 680,000 suspicious activity reports on potential check fraud in 2022, nearly double the 2021 total, and tied much of the increase to stolen mail. Business checks were named among the items being targeted.

ACH origination lets you pay vendors, contractors and, if you run payroll in-house, employees electronically from your online banking, usually with approval steps you control. Many banks also offer a tax payment service for federal and state deposits. Moving even your recurring vendor payments from paper to ACH tends to reduce both effort and exposure, and it often lowers the monthly fee as well, which I explain in my guide to business bank fees and account analysis.

Payroll deserves a specific mention. Many Dallas companies use an outside payroll provider, which handles the direct deposits for you. If you run payroll in-house, ACH origination is what lets you pay employees by direct deposit from your own account, with a file you create and approve. Either way, the bank needs to know your payroll timing, because ACH files have deadlines, and a file sent late can mean employees are paid late.

Sign three: you have had a fraud scare, or a near miss

An altered check that cleared, a vendor email asking to change bank details, an unfamiliar ACH debit: any of these is a signal that the account needs more protection than a monthly statement review. Positive pay is the core tool. For checks, you send the bank a list of the checks you issued, and the bank flags any item presented that does not match the number and amount. ACH positive pay or debit filters do the same for electronic debits, letting through only the companies you authorize.

Add payment approvals so one person enters a payment and a second person releases it, and set alerts for large or unusual activity. None of this replaces good habits inside the company, such as verifying payment changes by phone, but it gives the bank a way to stop a bad item before it costs you. I cover fraud prevention in more depth in my guide to protecting a business account from check fraud and payment scams.

Sign four: closing the month takes days

If your bookkeeper spends days matching bank activity to the books, or nobody can say what the company's total cash position is without logging into several accounts, information reporting will help. Daily balance and transaction reports, downloadable activity that imports into accounting software, and account reconciliation services that match cleared checks to issued checks all cut the time it takes to know where you stand.

This matters most for companies with several accounts, several locations or a lot of small transactions. It also matters to anyone planning cash closely. If cash flow forecasting is the real problem, a part-time finance lead can help, and what a fractional CFO does that bookkeepers cannot is a useful read alongside this one.

A simple test: ask your bookkeeper how long it took to reconcile last month, and what slowed it down. If the answer involves checks that cleared weeks after they were written, deposits that were bundled together so individual payments could not be identified, or downloading statements from several logins, the right reporting tools will save hours every month and make the numbers more reliable when you need them for a lender or for taxes.

Signs five and six: cash in the wrong place, and too many hands on the account

Some companies keep large balances in an operating account that earns nothing, while others run several accounts and constantly move money between them by hand to cover checks. Both are signs that the account structure no longer fits the business. A banker can set up the accounts so operating cash, reserves and payroll each have a clear home, and so transfers between them are routine rather than daily firefighting. Your accountant should help decide how much to keep in reserve.

The other sign is access. If several employees share one online banking login, or anyone in the office can send a wire without a second look, the company has outgrown its setup. Treasury platforms let you give each user their own credentials and limits, so the person who enters invoices does not also release payments. It also means that when someone leaves the company, you can remove their access in minutes without changing everyone else's password.

• Idle balances in operating accounts earning nothing
• Frequent manual transfers between accounts to cover checks
• Shared logins or no limits on who can send money
• No second approval on wires or large ACH payments

When it is still too early

Not every business needs a full treasury setup. A sole owner who receives a few payments a month by card or transfer, writes a handful of checks and is the only person on the account can usually manage well with standard business checking, mobile deposit and good online banking. Treasury services carry monthly and per-item charges, and paying for tools you do not use makes no sense.

A sensible middle step for many smaller companies is to start with just two or three services: mobile or remote deposit, ACH for recurring vendors and positive pay. Add more as volume grows. A good banker should be comfortable telling you that you do not need something yet.

How the setup usually goes

The process starts with a conversation about how money currently moves through your business: how customers pay, how you pay vendors and staff, how many accounts you have and who has access. From there the bank proposes a set of services and the account type that supports them, often an analyzed account where the balances you keep earn a credit against service fees.

Implementation involves agreements for each service, setting up users and approval rules, ordering a scanner if you need one, and a test period where you run a few payments or deposits to make sure everything works. Expect the bank to walk your staff through it. For owners in Dallas–Fort Worth, I handle that coordination myself so there is one person to call when a question comes up, and I keep in touch afterward because a business that grows usually needs its setup adjusted. If you are still deciding whether the bank you have is the right one for this, my earlier guide on outgrowing a basic checking account covers the wider relationship.

Questions people ask me