Nonprofit Cash Flow Management
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Nonprofit Cash Flow Management

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Virginia National Bank\’s Treasury Management department delivered this presentation to members of the Center For Nonprofit Excellence at today\’s workshop.

Virginia National Bank\’s Treasury Management department delivered this presentation to members of the Center For Nonprofit Excellence at today\’s workshop.

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  • Focus on non-profit benefits: eliminate photocopyin; eliminate detailed deposit tickets; improve donor mail data base via check images w/adddresses; separate staff/volunteer duties such as tax confirmations, donor record posting, bank deposits, email confirmations
  • FOCUS ON DIRECT DEPOSITS - - IS A LOW COST WAY TO PAY EMPLOYEES AND HAVE BENEFIT OF PAYING PAYROLL TAXES!
  • Who do you give paper checks to – vendors, beneficiaries, employees, temps, etc? How well do you trust all of them? You’re giving them your account data – bank routing number, your account number, serial number range, deposit balance indicator…… Check alteration risk. ACH debit process – preauthorized or not? MUST BE LACK OF AUTH – changing your mind doesn’t count.
  • Monthly Op – discuss monthly distributions – Payroll, recurring expenses. Forecast funds – buckets for when money will be spent This year vs. Next – MMAs & Investment sweeps were once a good business tool – what is right now?

Nonprofit Cash Flow Management Presentation Transcript

  • 1.  
  • 2. Nonprofit Cash Flow Management June 28, 2011
  • 3. Virginia National Bank Treasury Management Team
    • Steve Krohn – EVP and Managing Director
    • Ginger Germani – TM Officer
    • Carrie Gillispie – TM Representative
    • Brooke Jenkins – Merchant Card Representative
  • 4. What Can Cash Flow Management Do for You?
    • Now that you have this information, how do you make it more valuable day to day for your organization?
      • Goals
      • Tools
      • Obstacles/Barriers
  • 5. Banking Tools to Save Time, Lower Costs & Increase Efficiency
  • 6. Banking Tools to Save Time & Increase Efficiency
    • Business Online
    • Deposit Online
    • ACH Transactions
  • 7. Business Online
    • Business Online allows you to:
    • View account balances and transaction details
    • See current day deposit information
    • Schedule future and recurring transfers between accounts
    • Initiate direct deposit of payroll
  • 8. Deposit Online – (Carrie)
    • Deposit Online enables you to:
    • Save staff time by eliminating unnecessary trips to deposit checks
    • Speed up your access to funds through timely, daily deposits
    • Create your own check images and data
  • 9. Deposit Online
  • 10. ACH Transactions
    • ACH Payments are simply electronic transfers to or from one account and another account, even at another bank.
    • Common uses are:
    • A donor makes regular, recurring contributions on a monthly or quarterly basis
    • A customer pays service provider, such as utilities or rent
    • Employer direct deposits payroll to employees
    • Business pays supplier for products
  • 11. ACH Transactions
  • 12. ACH Transactions
  • 13. Reducing Online Banking and Transaction Fraud Risks
  • 14. Reducing Online Fraud Risk
    • Dedicated “banking” computer
    • Online authentication tools (i.e. tokens)
    • Dual approval to move funds
    • System level & User level transaction limits and service entitlements
  • 15. Reducing Online Fraud Risk
  • 16. Reducing Transaction Fraud Risks
    • Required 48 hour bank notification
    • Check Positive Pay
    • Positive Pay Payee Verification
    • ACH Positive Pay
  • 17. Transaction Fraud Statistics
    • Association for Finance Professionals (“AFP”)
    • 2011 Payments Fraud and Control Survey
    • http:// www.afponline.org/pub/res/topics/topics_pay.html
    • Underwritten by J.P. Morgan and available generally from AFP at no charge once you’re a registered website user.
  • 18. Transaction Fraud Statistics
  • 19. Transaction Fraud Statistics
  • 20. Merchant Processing Technology
  • 21. Merchant Processing Technology
    • Customization Capabilities
    • Online Capabilities
    • On-Site Event Capabilities
  • 22. Merchant Processing Technology
  • 23. Merchant Processing Technology
  • 24. Merchant Processing Technology
  • 25. Cash Planning
  • 26. Cash Planning
    • Understanding the FDIC limits
    • CDARS
    • Know Your Cash Flow
    • Layering
    • Laddering
  • 27. FDIC Limits
    • The FDIC insures up to $250,000 per entity in any one FDIC insured institution.
    • Currently (June 28 th , 2011) the FDIC provides unlimited coverage on deposits in non-interest bearing accounts.
    • The FDIC no longer offers unlimited coverage on interest bearing accounts, as it did from 2008-2010.
  • 28. CDARS
    • CDARS (Certificate of Deposit Account Registry Service).
    • Insures CDs up to $50,000,000.
    • Provides higher rate than Treasuries.
    • Approved for use by municipalities in 2007.
    • One monthly statement, one 1099 for tax reporting.
    • Less time spent tracking CDs spread all over town.
  • 29. Know Your Cash Flow
    • Monthly operating cash.
    • Forecast funds based on business cycles, campaigns & large expenditures.
    • What works this year will not always be the case next year.
    • Is your current account structure manageable and is it making your organization the most money?
  • 30. Layering Funds
    • What types of accounts do you use and what benefit are you deriving from them?
    • Use of multiple accounts can help you achieve greater interest earnings and is easy.
  • 31. Layering Funds
    • Single Account Structure
    • Interest Checking       $75,000      0.20%      = $150 annually, or 0.20%
    • ________________________________________________________
    • Layered Accounts
    • Interest Checking            $10,000      0.20%
    • Phoenix (3 year rate)        $15,000      0.45%
    • Funds Management CD    $50,000      1.05%      = $600+ annually, or 0.82% with funds rolling every 30 days to 6 months and with even more on the line as rates increase
  • 32. Laddering Funds
    • Finding comfortable and rewarding maturities.
    • Flexibility vs. Profit. What do you need and on what horizon?
    • CDARS can be an excellent way to handle endowments.
  • 33. TM Contact Information
    • Steve Krohn – EVP and Managing Director TM & Private Banking
      • [email_address] or 817-8648 or cell 987-4600
    • Ginger Germani – TM Officer
      • [email_address] or 817-8622 or cell 987-6198
    • Carrie Gillispie – TM Representative
      • [email_address] or 817-8655 or cell 906-9290
    • Brooke Jenkins – Merchant Card Representative
      • [email_address] or 817-8650 or cell 987-6202
  • 34. Thank you