How to reduce business banking fees
In business, little costs can add up. Bank fees are one potential area for savings within your company. See if your business can save money with any of these three suggestions to reduce banking costs.
Stop accepting & writing checks
It’s always a nice feeling when a customer check arrives.
But it’s risky to accept checks by mail if your business is depending on that money. A delay in the mail service, an incorrect address or a late-paying customer can hold up that check – wrecking your accounts receivable schedule and causing a cash flow crunch.
Some institutions charge to accept checks as well as issue them. Plus, it takes time to run to the bank to deposit checks. It also takes time to write checks, find an envelope, get a stamp and mail it.
Explore these options to accept and disburse funds:
Set up pre-authorized deposit. Supply your customers with your deposit information to authorize direct payment to your bank account. No more waiting for checks in the mail.
Electronic funds transfer. You can send money to a supplier or individual directly from your bank account. You can also set up automatic payments for recurring costs, like mobile phone bills.
Business credit card. Use a business card to pay for everyday business expenses like office supplies, fuel and meals. Most business credit cards offer an interest-free grace period (for example, 21 days) which gives you time to pay your card balance without incurring charges. It’s like a free short-term loan. Using a business card also reduces bookkeeping costs because your small transactions are recorded in one place for easy download into accounting software.
Eliminate paper bank statements
Banks often charge to print and mail monthly bank statements for commercial accounts.
You can save that money by choosing an electronic version instead – bank statements are available for download and printing by simply logging into your bank account online. You can download your bank transaction information directly into a Microsoft Excel file or similar format compatible with your accounting software.
You’ll feel good knowing your business is saving money and protecting the environment by reducing paper use.
Maintain a minimum bank account balance
One of the best ways to avoid annoying bank account service fees is to maintain a certain amount of money in your account.
For example, the bank may offer a plan without service fees if you maintain a balance of $5,000 or more. You can still access your money anytime, without restrictions. However, you will incur fees if your daily average balance for the month falls below that threshold.
Plus, some banks offer to pay interest on healthy deposit balances so you could end up making money as well.
These days, there really are plenty of options available to business owners who want save money and time doing their banking. Contact your banker to explore all options available to you. If you don’t like what your bank offers, it may be time to switch suppliers.