Why Your Small Business Needs an Annual Financial Check-Up
Every year brings new challenges to owning and operating a small business. Surely your business has adapted to those challenges, but have you reviewed your banking and cash management products and services to make sure they are in line with your ever-changing business needs? One way to ensure that you are taking advantage of the latest products and services is to schedule a time to meet with your banker and review your total banking relationship.
Financial institutions continually update their product offerings based on the input and product needs of the small business community. You may be able to improve your business’s operations by taking advantage of some of these.
Business accounts can vary based on the activity level in the respective accounts, and the deposit balances maintained within them. Many banks offer the ability to link accounts together, in an effort to reduce fees and provide additional services at reduced costs. A quick meeting with your banker to review your account and your cash inflows and outflows can help you determine which accounts are best for your business.
Lines of credit are most suited for short-term cash flow needs and should be used accordingly. Term loans should be utilized for equipment or real estate with a longer useful life and repayment period. If you have used your line of credit for something that has more of a long-term use, such as an equipment purchase, it may be wise to roll some of that balance into a term loan with an appropriate repayment period. It’s crucial to align your credit needs with the proper loan products to ensure you have sufficient cash flow to operate your business during the year.
Explore your online banking options, such as Webster Web-Link, which can provide instant online access to all of your accounts. You can see images of your paid checks, receive notifications about important events occurring in your accounts, and even initiate wires, ACH payments, and deposit checks directly from your office.
The best deterrent to reduce the risk of fraud is to take steps to prevent it, such as Positive Pay, which provides daily monitoring of all checks clearing through your accounts.
Ensure that you are making the most of your banking relationship and be proactive in making sure that you are utilizing all of the available banking products and services to their fullest potential.
When was the last time you met with your banker to review your banking and lending needs? Are you in the right deposit accounts? Are you taking full advantage of the product offerings available to your business?