Fall cash flow planning: Is your business keeping too much cash on the sidelines?
Article details provided by Shantel Laird, AVP, Senior Commercial Deposit Officer
Shantel Laird
AVP, Senior Commercial Deposit Officer
Start with a fall cash flow check-in
Every business goes through cycles: busy seasons that build up cash, and slower stretches that draw it back down. Fall is a good time to step back and look at that pattern with fresh eyes. If your business is sitting on more cash than it needs for day-to-day operations, that surplus should be earning something instead of sitting untouched in a low-interest account.
A few questions worth asking as you head into the new season:
- What’s your typical cash flow low point, and how much reserve do you need to get through it comfortably?
- Are upcoming costs on the horizon, like equipment maintenance, seasonal staffing, or supply cost increases, that you should be planning reserves around?
- Is your current account actually paying you for holding that balance, or is it just parked?
Our commercial deposit team walks clients through this exact planning process.
How much cash should your business keep in reserve?
There’s no single right answer, since it depends on your industry, revenue pattern, and upcoming obligations. But most businesses land in one of two situations:
You need frequent access to funds. A Statement Savings account, Yigh-Yield Savings or Money Market keeps reserves simple and accessible, with straightforward terms and low balance requirements to avoid fees, making it a solid fit for funds you might need on short notice to cover everyday business needs or unexpected expenses.
You’re holding a larger balance you won’t need right away. A High-Yield Savings or Money Market Plus account uses tiered interest rates, so larger balances earn a higher rate while remaining accessible through online and mobile banking. Staggering the terms on certificates of deposit also helps to maintain the liquidity needs while taking advantage of higher rates at longer terms. The right mix often isn’t one or the other. Many businesses keep a smaller operating cushion in Statement Savings and move the rest into a higher-earning account once they know it won’t be needed for a while.
“Fall is a great time to sit down and really map out the next few months, what’s coming in, what’s going out, and where the extra cash should sit until it’s needed. The businesses that plan ahead are the ones that stay steady through the slow stretch.” — Shantel Laird, AVP, Senior Commercial Deposit Officer
FAQs
How much cash should my business keep in reserve?
It depends on your revenue cycle and upcoming expenses, but a good starting point is enough to cover your typical slow season without dipping into credit.
What's the difference between Statement Savings and Money Market Plus?
Statement Savings is built for simplicity and everyday access. Money Market Plus offers tiered rates designed for larger balances you don’t need immediately.
Will moving cash into a higher-yield account limit my access to it?
No. Both options keep your funds accessible through online and mobile banking, so you’re not locking money away.
When's the best time to review my business's cash reserves?
Any seasonal shift is a good checkpoint, but fall works well since it gives you time to plan before winter slowdowns or year-end expenses.
How do I know which account is the right fit?
Our Croghan commercial deposit team can help you review your cash flow pattern and recommend the right balance of accessibility and earning potential.
For a deeper look at building reserves around seasonal ups and downs, see our related article.
Navigating Seasonal Cash Flow
Seasonal cash flow fluctuations are challenging but manageable. Croghan’s AVP, Senior Commercial Deposit Officer, Shantel Laird, shares strategies to keep cash flowing smoothly year-round.
