Managing working capital and building strong cash reserves vital in times of uncertainty

The past 3 years have been challenging for the business community and with business recovery having slowly gained some traction the temptation for business owners to go full-scale on business expenditure to leverage opportunities may be high.

It is important for businesses to be more disciplined around managing working capital and building sufficient reserves as a way to not only achieve business goals, but to also protect the business from the unknown.?This also helps in maintaining operations when sales are low and where possibilities exist, earn good interest on ‘lazy cash’ or ‘float’.?The latter is particularly important in times of elevated economic uncertainty. ?

NB’s Head of Business Banking, Chantell Littler, explains just how vital building emergency cash reserves are for any business and should be a normal part of good business management.

“The habit of saving is very important for businesses of all sizes, because the savings can act as self-insurance against shocks and also provide firepower for future business projects or ventures”, said Littler.?

“Businesses should also guard against the temptation of utilizing hard-won positive cash balances for any spend that does not feed the long-term objectives of the business.?Business cash balances should ideally be kept separate from cash that meets family and personal needs, it is unhealthy to allow that loose cross-over between our personal needs and what the business we run may need.?When there is a confluence between the two, even close family may genuinely not know where to peg their planning and aspirations, and the collective pressure of all these social expectations can eventually cripple the business.?We have created ideal business savings and investment accounts for exactly this reason and are in the process on enriching that offering.?These savings and investment accounts make sure that any float the business generates is return-optimal, and effectively generates some money whilst the business owner carries on with running their lives”, Littler added.

FNB has provided solutions for this allowing business customers to invest through a Business Call Account, Fixed Deposit Account, Flexi-Fixed Account and Business Savings Pocket.

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GUARANTEED RETURNS ON CAPITAL INVESTMENT WITH FNB FIXED DEPOSIT

FNB’s Fixed Deposit Account gives businesses fixed investment terms with competitive interest over the period of their investment. This investment account typically gives you a higher interest rate than investment solutions that are available overnight or with notice.

The FNB Fixed Deposit account allows business to invest from as little at E1,000 with a minimum fixed term of 6 months and a maximum of 60 months (5 years). This is a great solution for businesses that want to build reserves or save for future business projects.

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NO MONTHLY ACCOUNT FEES FOR THE FNB FIXED DEPOSIT ACCOUNT

Speaking on this investment solution, Littler pointed out that FNB business customers find this account even more valuable because it earns them higher returns than short term investment solutions that mature overnight or on notice.

“FNB’s Fixed Account has no monthly account fees, which should be attractive to our customers.?The biggest advantage of this investment solution is that the FNB business customer carries no risk, while returns are guaranteed. Although the interest rates for this product are tiered, we are open to negotiations with our customers to find a favorable rate based on the investment and the term”, Littler further explained.

In addition, customers can also use the FNB Call Account which allows you to make additional deposits at any time while giving them easy access to the invested funds, and the FNB Flexi-Fixed Deposit Account which offers a higher rate of interest with access to 15% to your investment after only 24hours’ notice in case of emergencies.

Just like the FNB Fixed Deposit, the FNB Business Call Account, FNB Savings Pocket Account and the FNB Flexi Fixed Account do not have any monthly account fees. Moving funds from this Accounts to an FNB Business Gold Account owned by the same business is also free.

At the end of the fixed term chosen, the investment value is deposited into the business’ current account with the interest earned.

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OPENING AN FNB FIXED DEPOSIT ACCOUNT FOR YOUR BUSINESS MADE EASY

To open an FNB Fixed Deposit Account, businesses that are already banked at FNB can simply contact their Relationship Manager while businesses that are not FNB customers need to provide the following:

·????????Company Documents

·????????Eswatini National IDs of Company owners/directors

·????????Proof of Residence of Company owners/directors

Businesses can monitor their FNB Fixed Deposit Accounts through:

·????????FNB App

·????????Online Banking

·????????Online Banking Enterprise TM

For more information on how you can start saving for your business contact your Relationship Manager or Call 800 6100.?