Aletha Hall

Monday, 30 August 2004 13:14

Internet banking for businesses

Internet banking has become an essential part of business banking, and its use among businesses continues to increase. Online banking can be quick and convenient, allowing business owners access to accounts around the clock.

Taking advantage of online banking

There are a number of reasons online banking has become an important service for businesses. Benefits include:

* Cost savings. The days of companies purchasing software for multiple computers are a thing of the past. Thanks to Internet banking, the ability to access account activity can be implemented with no software expenses, and it can allow multiple employees in different locations to access account information.

* Time savings. Using the Internet increases the efficiency of performing all of the business's banking activities. No matter where you are -- an office, at home or on vacation -- if you have access to the Internet, you can pay bills, reconcile accounts and perform many functions that are critical to running a business.

* Have a single Internet portal. Finding a bank that offers a single point of entry to accounts and services saves time and allows business owners to move more easily from one application to another.

* Access information. Business owners can establish accounts to allow multiple users to access financial information. At the same time, the owner can limit certain users to conduct specific functions, such as having the ability to reconcile accounts but not pay bills. This option enables the business owner to ensure there are proper checks and balances, while reducing the potential opportunities for fraud.

* Export files. Many banks provide an online service that allows the business owner to export files from the bank's site, using the Internet, into the company's financial or accounting software. At the beginning of a month, the business can review every transaction that took place during the previous month and move that information immediately to the company's records. This speeds the reconciliation process, enables the company to more quickly identify potential fraud and allows for better and faster use of cash.

* View check images online. Some banks offer companies the ability to view cancelled checks online, including the endorsement. If your business does not receive actual paper checks from the bank each month, check imaging helps verify that the right person endorsed the checks. Not having this functionality at your bank means you may have to wait for weeks to receive a paper copy of the check.

Finding the right online banking relationship

It is important to find a bank that meets the needs of your business. To help find the online banking relationship right for your business, consider the following questions.

* Is the bank strictly online or does it offer bricks-and-mortar branches as well? Many business owners want and need the security of a bank and bank personnel they can visit.

* How are disputes handled? Ensure that customer support is readily available. Particularly if you select an online bank, find out what the estimated turnaround time is for e-mail communication and how long telephone callers are typically placed on hold. Make sure you know if there are charges for telephone assistance.

* Is there ample security in place? Make sure secure areas of the bank's Web site are password-protected and are labeled secure documents. Banks have integrated a high level of security into Internet banking. Security measures include unique user identification codes and passwords, as well as a 128-bit encryption that scrambles information before it is sent, then decodes and processes it when it reaches its destination.

* Is the bank federally insured? Banks are required to be federally insured by the Federal Deposit Insurance Corp.

* What are the fees? Before signing up for an account, understand the monthly fees, as well as any miscellaneous fees that may apply, such as returned check fees.

Online banking does not mean business owners should abandon relationships with their bankers. Small businesses, in particular, often have a continuing need for face-to-face meetings with their banker.

An online account is another tool for businesses to help eliminate barriers that can separate a business owner from his or her financial information.

ALETHA HALL is vice president and manager, treasury management, with Fifth Third Bank. Reach her at (614) 744-7654 or via email at