One of the strongest signs of a healthy relationship with your bank is the ability to routinely discover and implement new ways to maximize your money.
“Let’s say you don’t have any lending needs, everything is paid for and you’re just at a point where you’re making a lot of money,” says Debbie Miller, vice president and commercial deposit specialist at Consumers National Bank. “Instead of letting that money just sit in your checking account, you can try what’s known as a sweep account.”
A sweep account automatically transfers amounts that exceed a certain level into a higher interest earning investment option at the close of each business day. It can be used to pay down a line of credit as well as save you money on interest.
Cash management services can help your business improve cash flow, lower your costs and identify ways to protect your money that provide you and your team with peace of mind about your company’s financial assets.
Smart Business spoke with Miller about how to work with your bank to find the right cash management services to support your business and protect your funds.
What are some popular bank products or services that can help any business?
Fraud protection has become a hot-button as you see more cases of internal embezzlement and attempts to hack into corporate accounts. One of the most popular tools to protect against fraud is Positive Pay, which is used by many banks to match the account number, check number and dollar amount of each check presented for payment.
The company will transmit a file to the bank to make sure the check information matches up with the file information. If everything matches up, the check is sent through for payment. If there is an exception, the check is not cleared and you get a report.
Remote deposit capture is another tool that fits under both fraud protection and convenience. Instead of having to run to the bank to deposit checks, you can deposit them electronically from your office. You get a copy of the check front and back and in most cases, you can refer to past deposits going back as far as 24 months.
How can your company prepare for a meeting with your bank?
In addition to the standard checking account statements from the past two to three months, you should bring an analysis statement. A bank statement will list the number of deposits you have and the amount of deposits, but it doesn’t tell you how many items were in that deposit. The analysis statement is more detailed than your average bank reconciliation statement.
It might say you had 100 deposits, wrote this many checks and had an average balance of X. You also should be knowledgeable about background information on your business. Be able to describe your sales cycle, what your typical transactions look like, and how you pay your suppliers and employees. This information can be very helpful to a bank in arriving at conclusions about the best tools and solutions to meet your company’s needs.
What if you feel like your bank is not meeting your expectations?
Ask your bank what it can do to help you improve your cash flow. Maybe you feel like you’re getting a lot of service charges and paying for things that aren’t really helping your business.
There are more advanced financial tools out there that can help your business. If you don’t feel like you’re being made aware of these options, you need to ask questions.
What additional steps can you take to protect your funds?
Many leaders want to know how they can get better control over their funds. You may have a person who handles your financial reporting who has been with you for years, someone you would never suspect of improper activity. There may not be any reason to suspect a problem, but you still should take precautions to protect your business.
Work with your bank to set up a process by which you get regular reports about account activity. If you see something that isn’t right, you’ll know about it and can promptly deal with it.
Insights Banking & Finance is brought to you by Consumers National Bank
