How to Use Deposits to Manage Your Cash Flow

man working on business
You’ve created a business plan, found the perfect location, set up your Square account, and begun accepting payments. Now it’s time to look to your cash flow, since healthy cash flow is crucial to a successful business.

A quick review: Cash flow is defined as the total amount of money that’s going in and out of your business, and it affects your overall liquidity.

Without cash coming in from customers, you can’t spend money on things like inventory, payroll processing, or everyday expenses. Without paying for new inventory, employees, or expenses, your business will cease to exist. Cash flow can be a catch-22. In fact, 82 percent of businesses fail as a result of cash flow issues.

But don’t worry. With a few tools and some planning ahead, you can ensure your cash flow game is strong. The most essential of those tools? Deposits (since deposits determine when you have that cash in the bank).

With Square, you can time when deposits hit your bank account, giving you the freedom to choose when you have cash for spending.

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Square’s deposit options

Square has three different types of deposit: next business day, instant, and scheduled.

Next-business-day deposit

Square’s default next-business-day option deposits money into your bank account in one to two business days. Square groups and sends payments based on the time you choose to end your day. By default, your close of day is 5 p.m. PT/8 p.m. ET, but you can customize your close of day if your business stays open later.

As shown below, if your business closes at 5 p.m., transactions completed before close are deposited on the next business day. Transactions completed after 5 p.m. are deposited on the second business day. Next-business-day deposit is free of charge. Here’s more information about setting up your Next Business Day schedule.


Instant Deposit

If you want the money to hit your account even faster than the next business day (as in instantly), you can use Instant Deposit. Whether it’s late at night or over the weekend, Instant Deposit lets you deposit your sales into your bank account with just a tap.

For each deposit, the fee is just one percent of the amount deposited. You can learn more about how to get started with Instant Deposit here.

Scheduled Deposit

If you want to set a specific time at which each day’s sales are deposited, Scheduled Deposit makes that easy.

You can customize your deposits to occur just after the close of your business day. That way, if you’re open until 6 p.m. on weekdays and 8 p.m. over the weekend, you can assign each day’s deposits to hit your account right after each day’s close, when it makes sense for your business. And you can set it and forget it. You just need to customize it once and then the feature goes on autopilot.

Scheduled Deposit costs just one percent of the deposit amount per scheduled deposit. Learn more about setting up Scheduled Deposit.


Deposits in real life

So here’s how deposits may play out in your day-to-day work.

You may utilize Instant Deposit to pay for a one-time inventory delivery. For example, a photographer may shoot an event on Friday and use Instant Deposit to print those photos for a weekend delivery.

If you have weekly bills that you pay on a regular basis, like a restaurant may pay for food deliveries and supplies, Scheduled Deposit is a great way to ensure you have cash readily available.

A bar owner with fairly set operating costs may utilize next-business-day deposits to keep a regular influx of cash deposited into their account during the business week.

Whatever your business’s needs, Square has a deposit setting that can help you run, grow, and succeed.

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