- How many checks does your business write in an average month?
- How many deposits do you make in an average month, and how many individual items are included in those deposits?
- What is the average monthly balance your company maintains in the account?
- Do you deal heavily with cash?
- Do you need to have a branch located near your place of business? Or, can you handle your day-to-day banking through other means, such as a courier, ATM, lockbox for deposits and Web-banking for transfers and daily reconciling?
Weighing the options
The answers to these questions will lead to the beginning of a very specific business solution. Most small to mid-sized businesses are prime candidates for a bank's basic business or free business checking product because their monthly transaction levels -- checks written, deposits made, items deposited -- are low enough to warrant very low or no fees.
Businesses with higher transaction counts -- usually 250 or more total transactions each month -- might be required to open a typical commercial checking account, which is subject to transaction fees. This type of account also offers an earnings credit, based on the average collected balance, that is used to offset total monthly service charges.
With such differences, it is important to shop around before deciding on one bank. Find out what each bank charges per transaction item and what rate it uses to calculate the monthly earnings credit.
For those businesses that are fortunate enough to have excess or unused balances in their account each month, most institutions have expanded business money management programs that combine a business checking with some type of interest-bearing account.
Sweep options are also available. They allow you to automatically transfer excess funds to a business savings, money market or other investment vehicle on a daily basis to help maximize your return on excess balances.
And, what could be more convenient than to be able to manage your business accounts in a real-time, online environment through a business Web-banking setup? As your customers and suppliers continue to move core operations to the Web, being able to conduct similar transactions in real time provides a competitive advantage.
The options for simplifying your business banking are probably more significant than you realize. You just need to be more aware of your product and service needs as a bank customer.
Craig Johnson is president and CEO of Franklin Bank, a full-service financial institution that has served Southeast Michigan for more than 20 years. Franklin offers its commercial customers many specialized services, including next-day funds availability, low-cost courier service, extended branch hours, Web banking services and a streamlined small business lending program. Contact him or one of Franklin's professional sales associates at (248) 358-4710 or via the Web at www.franklinbank.com.