King Hill

Friday, 16 July 2004 09:23

Beyond the basics

Most businesses are familiar with the basic advantages of online banking -- 24-hour access, the immediacy of transactions and the convenience of banking from office or home all are well-known benefits for hard-working executives and business owners.

As technology, banks and businesses have become more sophisticated, many businesses are discovering that online banking has applications that go beyond simply monitoring balances and transferring funds among accounts.

Businesses with tight cash flows may still need to check daily account balances, and those with cyclical or seasonal income may want to continue to use online banking services to help them decide whether to pay down debt or invest excess funds. At the same time, companies may also want to investigate some of the less obvious benefits of online banking.

Businesses that expand their online banking presence may appreciate the following.

  • Fraud control. Online banking can be used to monitor checks presented to an account for payment. In some cases, businesses submit a list of checks written on the account and banks use that list to check against the actual checks presented for payment.

    In other instances, businesses receive a list of the checks presented for payment and authorize those that are legitimate. In either scenario, suspect checks are identified quickly and can be investigated.

  • Improved document storage. Online banking often offers e-statements or statements on CD-ROMs that help eliminate tedious and costly check storage and document retrieval. Most banks keep records available online for 60 to 90 days, then send statements for permanent archiving.

    Receiving statements on CDs means bulky file cabinets or off-site storage can be eliminated. It also means employees aren't required to sift through 1,000 checks in a storage facility to find the one that's needed.

  • Receivables processing with images. Businesses that use a lockbox system to accept payments can receive actual images of the documents on the same day they were processed. In the past, manually typed records were posted online, while actual records were mailed, overnighted or couriered to businesses.

    That created delays in posting and additional expenses that imaged records eliminate.

One thing to consider is that while online banking is appropriate for every company, not all online banking features are good for every business. As with any other business decision, managers should consider what level of online banking best suits their company.

Most banks offer three or four online banking products, with fees from $5 or $10 per month to $200 or more; additional components carry additional fees. While it is easy to get caught up in the wealth of highly effective technology that is available, businesses need to be objective in evaluating which processes they will actually use in order to avoid overpaying.

Smaller firms that issue only 10 or 15 checks each month, for example, may not benefit enough from receiving statements on CD-ROM to justify the cost.

One concern about online banking that has largely disappeared is security. Virtually all banks use military-grade encryption and secure socket layers (SSL) for transmissions, which means transactions are very safe. Businesses can add an additional layer of security by creating complex, random passwords that include alpha, numeric and special characters (j1h#ill2*, for example).

That concern has been replaced by worry over check fraud, which is why systems such as Positive Pay that allow businesses to scrutinize checks before they are paid are becoming more popular.

The economic wave of the future seems clearly to be moving away from checks completely and into electronic banking, but until that transition is accomplished, businesses could end up paying part of the losses attributed to fraudulent checks.

Online banking can help prevent such expense -- and boost productivity and speed bookkeeping at the same time. Judy Hill is senior vice president in charge of treasury management at MB Financial Bank. Reach her at (312) 633-0333 or through the company's Web site,

Monday, 22 July 2002 09:45

Perplexed by technology

I’m thinking about integrating e-commerce applications into my sales operations. What issues will I have to consider before I can do so?

Getting into e-commerce is like buying a backyard pool: It looks real easy on the packaging, but when you start setting it up, you’ve got electrical, landscaping, insurance issues and a host of others that seemingly pop up out of nowhere.

With e-commerce, you’ll have to consider security issues, legal issues, network issues and compatibility, all the way down to nontechnical issues such as whether your nontechnical sales people know how to use the ’Net. Plus, you’ll have to consider supply-chain implications, such as what impact selling on the ’Net will do to your existing methods for getting product to market and what impact that will have upon your vendors, suppliers and customers.

The moment you begin thinking about integrating e-commerce and existing sales, break out the checklist and start at the top.

My company has an external sales staff and I’m considering buying them either laptop computers or handheld PDAs to use in the field. Is there much difference between the two?

Yep. PDAs have limits. Laptops are full-functioning computers, and some of them are really light, too. The question to ask is, “What are we going to do with this tool?”

If you’re just going to use e-mail applications, fPDAs will work fine. If your staff’s going to function on the road, just like you’d have them do at headquarters, you’d better give them laptops.

In the future, however, there will be little difference between the two. You’ll probably use your wristwatch to connect to your network. Think Dick Tracy, only cyber.

My customers are complaining that our company Web site is too cumbersome. We want to retool it, but don’t know where to begin. What should we do?

Look at your Web site from a home computer connected with a 28.8 modem. If you fall asleep waiting for pages to load, unplug it, fire your developer and start from scratch.

Think like a customer and build something that serves the customer’s need. Forget about how the site is built. Concentrate on what you want it to do and don’t settle for anything less. Otherwise, your company’s ability to compete on the Net could be at stake.

King Hill ( is director of marketing services of DigiKnow, a Cleveland-based digital marketing communications firm with clients ranging from Fortune 500 companies to professional sports teams. He can be reached at (216) 292-7259 or on the Web at