It’s just like a marriage
To expect a bank manager or officer to play such close attention to your account that he (or she) knows when you intend to deposit money and to know when to hold back a cheque is a hopeless dream.
He has neither the time nor the resources, and you can complain until your blue in the face but, in the end, you have the sole responsibility to manage your bank account.
All small business owners have a relationship with their bank and like a marriage, the relationship can be harmonious or stormy or somewhere in between. You have to work at having a harmonious and happy marriage. You have to take into account the feelings and wishes of your partner before taking a position or making a decision. So too with banks.
Learning how to develop a skill in handling your bank is only one skill the small business operator must learn, but it may be the most important because it cannot be entirely delegated to your accountant.
Communication is everything
If you write a cheque that may take your balance over the limit let your bank manager know or better still let your bank know a month in advance.
After all, you prepared a projected cash flow at the beginning of the year, didn’t you? And you are monitoring and adjusting it month by month, aren’t you?
If you haven’t prepared a projected cash flow statement to give you an idea of how much money you will need for the year then you are really managing by the ‘seat of your pants’ and anyone who manages ‘by the seat of their pants’ will end up with the ‘seat out of their pants!’
Make your banker your friend
If the period of your shortness of funds is an extended one then talk to your bank about a higher overdraft or an increase in your present loan. To get a loan from your bank it’s essential to have all the information which answers any concerns the bank might have about your ability to repay the loan.
Once you get your money keep your bank informed about how your business is travelling in both good times and bad.
It’s not a one-way street
Your relationship is not a one-way street and you should expect your bank to provide you with the standard of service which you expect from all the firms with which you deal.
8 points for a better relationship
The Australian Society of CPA’s has provided an 8 point checklist for a better banking relationship.
Can you easily contact your manager when you need to?
Do you have a good working relationship with your bank manager and does he or she understand your business and the needs of that business.
Are you confident in the ability of your bank manager and his support staff? In particular, can you rely on the financial advice given by your bank manager and does the staff have a good working knowledge of the products and services relevant to your business.
How soon can you get appointments to discuss important financial agreements? Unacceptable delays must be discussed with your bank. Are you satisfied with the location of discussions about business matters, whether it be at your premises or the bank’s?
How long does it take to receive a response on the application for a loan facility. Is this time acceptable?
Does the bank keep you fully informed of the charges for business current accounts, loans and overdrafts with statements of account provided regularly?
How frequently are errors made and if there are any, how are they handled?
Are you satisfied with the service and attitude of the branch staff?
Finally, and most importantly, review periodically the service which your business receives from the branch and determine whether the bank is providing good value for your expense. Remember - ask yourself if you would recommend the branch where your business account is kept to someone else who is considering opening a business bank account.
Remember that if you need any help we are only an e-mail away - Contact Kelvyn Peters CPA & Associates. If you just need a little help, you will find it at http://profitstrategies4business.com
About the Author
Kelvyn Peters is one of Australia's longest serving Tax Agents. Kelvyn was registered in February 1962.
He is a director of Restaurant Catering Qld Inc the peak employer representative in Queensland, and advised the hospitality industry for many years.
His speciality is moving in to rescue ailing restaurants.
Kelvyn Peters CPA has spent over 20 years experimenting and researching methods to help small business in meaningful ways that are affordable.
Kelvyn and his associates have perfected it with their local clients now they are going global.