How to make the exponential benefits of philanthropy work for you

Philanthropy is the right thing to do. There’s no question about it, says Chad Hoffman, president and CEO of Richwood Bank. Not only does it build stronger communities where we live, work and play, it can also benefit your business.

“People in today’s society, especially millennials, like to get behind causes. If you support organizations that they follow or are passionate about, you have a better connection with that group of customers or potential customers,” Hoffman says. “There is a business benefit — people like to work with people who connect to the things they believe in.”

For example, Richwood Bank created three coffee shops to help people see the bank as a destination, a place for interaction. Customers (and noncustomers) come to the lobby and donate to one or more of the bank’s 20 community nonprofit partners. In return, they receive a gift card for “thank you” drinks based on their donation-giving tier level.

Smart Business spoke with Hoffman about the intersection of philanthropy and business.

How does philanthropy benefit businesses?

You can use philanthropy as a sales tool to create a connection, because there are so many choices. Customers often don’t buy a product for being a product; they buy from the person or business. It can be as simple as providing a service, pro bono, to a charity and then letting potential customers know so they’re more apt to shop with you.

Philanthropy can be used for recruiting. If an employee is passionate about an organization or serves on a nonprofit board, then your company could support it, too. Job candidates see you supporting the causes of your employees and know if they become a team member, you’ll do the same for them. Nonprofits also will acknowledge you, which can boost employee morale. It helps validate that they’re in the right company.

Philanthropy is an expense on your books, even though it’s tax deductible, but you can consider it marketing, too.

What are some options for a charitable giving strategy?

You’ve got to know your purpose, like it says in Simon Sinek’s book “Start with Why.” Why are you in business? What are you trying to accomplish? You want to tie your philanthropy to that mission and vision. Once you know what your company is passionate about, you can start building relationships with organizations that support or believe the same things that you do.

One of the best things you can do is help a nonprofit create relationships. If you give money, that’s good for this year. You can volunteer and that’s good for today. But if you bring that charity five people who are interested, who may give or volunteer in the future, you’re helping build a network. Also, you’ll get the largest impact by aligning the values of everyone involved, so the charity and your business work hand-in-hand. For example, let your employees pay to dress down and then put that money toward a charity with your values or that relates to what your business does.

How should business owners communicate? How do they make it informative without sounding like they’re bragging?

Make a list of the organizations that you support financially or as a board member to try to attract customers and staff, but you don’t have to share the details. Otherwise, you risk people thinking: No wonder my prices are so high; if you’re giving that much money away. Some causes are political or divisive, so avoid publicizing those. Also, don’t stretch it past what you’re actually doing or try to make it sound bigger than it is. It could come back to haunt you.

Internally, discuss your philanthropy on an ongoing basis to keep your employees engaged. Also, list your efforts on your website. You could proactively promote it to the community on an annual basis, letting people know what nonprofits you supported for the year, while making sure that it was true and significant support.

How can companies set up a charitable foundation, trust, scholarship, etc.?

Community foundations can help you set something up, handling the technical aspects. Organizations like The Columbus Foundation, Union County Foundation or Delaware County Foundation hold it for you, so you can direct the funds. They make it as easy as possible to support a good cause and benefit your business at the same time.

Insights Banking & Finance is brought to you by Richwood Bank

Companies must identify, quantify risk to brace for turbulent future

Globalization has led to exposures to new and different risks. Large, multinational companies have risk management programs and experts dedicated to managing those threats. Many mid-market companies, however, do not.

These expanded concerns could affect companies’ income and operating statements through volatility in currencies and commodities. And the expectation of interest rate increases only adds to the worry.

“This is the first time there has been volatility in these areas in more than a decade,” says Jim Altman, Middle Market Pennsylvania Regional Executive at Huntington Bank. “Most people haven’t experienced a lot of volatility. Markets have moved in earnest over an extended period, so companies that are focused on the day-to-day can lose track of the bigger picture.”

Smart Business spoke with Altman about areas of increasing risk and forming a strategy to address them.

What are some of the more pressing risks companies face today?

Those who follow the news from the Federal Reserve could get the impression that interest rates will continue to move. Until now, an entire generation of people have traded instruments and run businesses who haven’t had to manage through a rate cycle with rising rates.

In currency, there is a weaker dollar environment. This could help multinational companies that are selling overseas, but it poses a risk for others depending on where their exposures lie.

There is also some concern that the price of commodities could increase, with reports from The World Bank predicting rising costs for energy and agriculture commodities.

How should companies address these threats?

Businesses need to understand not only the risks they face, but quantify how exactly those risks will affect their company. If interest rates go up 3 percent, is that really a problem for the business? If aluminum or copper goes up 25 percent, is that something to worry about? And if the dollar depreciates 10 percent against the euro, will the company feel any effect?

The best way to manage through volatility is to be disciplined. Understand the potential risks and create a plan to deal with them. But know that exposure hedging is a risk-mitigating exercise, not a profit-making activity, in part because forecasting unexpected movements is too difficult to predict.

How well do companies identify threats with enough time to put a plan together to address them?

Some companies are extremely well prepared to face risk. They have veteran managers who are capable of identifying and quantifying the threats facing their business.

Others are less prepared. They tend to operate intuitively or hold on to the notion that markets will settle down soon because in the past five or 10 years, that’s what they’ve done. However, past performance doesn’t guarantee things will be the same in the future.

It’s very difficult to fix a problem once it has manifested. Managing risk means thinking of what could happen in the future and making a plan to brace for a potentially bad scenario.

Banks and risk managers take a long view. They understand the importance of quantifying risk and know that hope is not a strategy. They measure multiple types of risk in a global context. They also know that not every risk needs to be hedged. It’s not possible or recommended to try to hedge against all risks, but where a company faces the chance of significant damage from a threat, there needs to be a plan in place to mitigate or avoid that.

It’s easier to execute against a strategy when a company has a plan that everyone agrees on. Otherwise, there can be a lot of indecisiveness. Discipline works when volatility is on the horizon.

Businesses are coming out of a period of low volatility and potentially a period in which things aren’t going to behave as calmly as before. Companies should identify and quantify risks, and talk to advisers to develop a plan to withstand volatility.

Banks can frame up the problem and work with companies to find solutions. But ultimately it’s up to the company to take action on its own.

Insights Banking & Finance is brought to you by Huntington Bank

How culture affects performance in an increasingly competitive market

Culture is the base upon which everything else in a company is built. And like a building’s foundation or a tree’s roots, it needs to be strong to support all that’s built and grown on top of it.

“A company’s culture affects how well it attracts and retains employees as well as its ability to attract and retain customers,” says Jon Park, Chairman and CEO of Westfield Bank. “Having a culture of caring and helpfulness, a culture that’s solutions oriented, makes an impact in the market.”

Company culture has received greater attention in recent years. A low unemployment rate has given candidates more options, so they are shopping around to find the best opportunity. Also, information on companies’ cultures has become more available as people share their experiences on the web, and websites have been created to collect and catalog what employees have to say about their work experience.

“Many prospects are looking for that type of information,” he says. “And with the greater transparency brought on by the internet, they can find it.”

Smart Business spoke with Park about culture and the many ways it affects a business.

What difference does a company’s culture make to its business relationships?

Happy employees who have a can-do attitude translate to satisfied customers. A caring culture goes a long way toward building strong customer relationships.

Banking, in particular, is a relationship-based business that’s founded in trust. Customers have plenty of choices when it comes to banking, and any business for that matter. They want a partner that’s authentic, consistent and reliable, and that listens to and respects them. Culture has a lot to do with all of those things because customers experience a company’s culture through the behaviors of its employees.

It’s human nature to want to do business with people who are likeable and who can be trusted. As customers consider where or with whom they will do business, ideally they want to work with a company that’s trustworthy, fair and responsive.

What are some signs that a company has a healthy corporate culture?

A company’s cultural health can be seen in the caliber of talent it employs and how long it’s able to retain its people. A strong culture reduces turnover.

Internally, a company can get a sense of the state of its culture through employee engagement surveys. Anonymous feedback on a variety of topics helps executives understand what’s important to their staff. The results can be compared to those of their peers to gauge how well they’re doing compared to the market, and the feedback can be used to make internal improvements.

Customers can learn about companies online. Some companies talk openly about their culture through videos, posts to social media pages and blogs on the company website. Also, how active a company is in the community can help others get a sense of the culture.

What is important for companies to focus on if they want to have a strong corporate culture?

Core values are central to culture. Companies should bring the focus to those values by communicating and demonstrating them through their leadership.

Employees appreciate a family-friendly culture, and they want to know the company cares about their best interests. It’s human nature to want to make a difference and be on a winning team. Companies can foster that by recognizing employees’ achievements, rewarding top performers and generally offering encouragement. Employees should also be given latitude to make decisions on behalf of the business.

As companies, banks included, compete for increasingly limited resources, they should consider telling their story from a cultural standpoint. Shoot videos of company outings and post them to the company website so candidates can get a feel for what it’s like to work for them. Talk about the company’s history, tell stories and use examples that enforce the culture that forged the business’s image in the market and that continues to live through the actions of its people.

A strong culture can draw out the passion of employees and release the potential of the company. Anything that can be done to improve it is well worth the effort.

Insights Banking & Finance is brought to you by Westfield Bank

Important considerations when applying for an SBA loan

If you’re a small business owner, you may have questions about the best type of loan for your needs. Whether you’re just getting started or have been in business for years, you may be able to benefit from an SBA loan.

“SBA loans can be a valuable financing alternative,” says Kirk Jacobson, Senior Vice President of Small Business Lending at Northwest Bank. “With an SBA loan, you get longer terms and more flexible structures than conventional financing. However, in order to secure financing, preparation and working with an experienced SBA lender is key.”

Smart Business spoke with Jacobson about how businesses can leverage an SBA loan for their needs.

What qualifies a company for an SBA loan?
Securing an SBA loan isn’t much different from obtaining a conventional loan. There are a few steps a business should take to help the financing process go smoothly.

  Build your personal and business credit scores. Your personal credit score is important because it demonstrates your level of commitment to your business. However, it’s also important to include financials statements, tax returns and projections with your loan application, which give your bank a full picture of your business.

  Check with your bank to see what they require as part of the loan process. This may include a personal guarantee, collateral, insurance documents and accounts payable information.

  Gather financial and legal documents to prove ownership.

  Develop a business plan that shows your bank how you will use the loan and gives them an idea of what your repayment terms might look like.

What can companies do to increase their chances of obtaining an SBA loan?
When applying for an SBA loan, organization and preparation are key. The more prepared you are, the easier it will be for your bank to understand and process your loan. The SBA’s website, sba.gov, also has resources you can use to prepare before you meet with your bank.

Your banker should be seen as a trusted advisor that you can rely on to help your business succeed. The more information you provide them, the more likely they’ll be able to help you secure financing.

How does your current status or the nature of your plan impact whether an SBA loan is right for your company?
If your company is still relatively new, your loan request could require an SBA enhancement. SBA loans also require borrowers to provide all available collateral, but many times there’s not enough to cover the loan. In this case, SBA loans are excellent financing alternatives because they can help offset the required collateral.

What are some misconceptions business owners have about SBA loans?
Many busy business owners assume it’s time consuming and expensive to get an SBA loan. However, when you work with an experienced SBA lender, the process should be relatively smooth and efficient.

Most SBA programs also give you the flexibility to incorporate any fees and other costs right into the loan, so there’s less you have to worry about upfront. This not only makes SBA loans an attractive financing alternative, but it also enables you to keep operating costs available for your daily expenses.

Never assume your business doesn’t qualify for an SBA loan. Talk with your lender about the current state of your business and any future plans for expansion. They’ll be able to help you decide if an SBA loan makes sense for you.

Northwest Bank is Member FDIC. Equal Housing Lender.

Insights Banking & Finance is brought to you by Northwest Bank

The benefits of working with a private banker

Private bankers serve as a conduit between a bank and its busy professional clients.

“They are a single point of contact who act as a personal CFO,” says David Hall, vice president of private banking at Home Savings Bank. “They listen to their clients’ needs and use their experience and connections to give their clients the best financial advice and guidance regarding their unique set of circumstances.”

Typically, private bankers help their clients with deposit products and customized lending solutions. However, they also help guide clients through financial planning, investment needs, trust and estate planning and other areas of financial expertise.

In some cases, a private banker’s help can extend outside of the financial realm.

“It wouldn’t be unusual for me to help a client who lived in Ohio and was selling a Florida condo find a real estate agent and negotiate the commission and terms of the sales agreement, or help decide how to make the condo saleable and pick a contractor to do the renovation work,” Hall says.

Smart Business spoke with Hall about the role of a private banker in the lives of busy professionals.

Who should consider working with a private banker?

Busy professionals benefit the most from a private banking relationship. These people spend most of their time running their businesses and are looking for a knowledgeable banking resource to help simplify their financial life so they can focus their extra time on hobbies and family. They are experts in their line of business and are looking for someone knowledgeable who they can trust to help them manage their finances.

What is the relationship of a private banker with an individual’s other financial advisers?

Private bankers are typically part of a wealth team that should have access to a financial planner, trust planning and administration, investment portfolio management and retirement planning. They work hand in hand with them and the client’s external advisers and are not looking to replace them. Rather, their seat at the table helps busy professionals evaluate and manage their financial lives and relationships.

Once a relationship is established, what should the client expect from the private banker?

It should be expected that the private banker conducts regular financial check-ups, though their frequency should be dictated by the client’s personal preference. It’s advisable for clients to have at least an annual review of their finances, including their insurances, to make sure they are on track with their financial plan.

A client’s financial documents should be reviewed, such as their will, living will, durable power of attorney and health care powers and directives at least every three to five years to make sure they are still up to date and aligned with their goals.

Private bankers can also look after the finances of their clients’ spouses, partners and family, at the very least knowing where the finances could be found so that the appropriate steps can be taken in the event of an unexpected death.

Clients should be able to call their private banker outside of normal business hours and get a response. It will be clear that the relationship has value if the client is happy with his or her ability to transact banking in an easy and efficient manner.

What should someone look for in a private banker?

While it is good to know if a private banker has any specific accreditations, it is also important to know what experience a private banker has and whether it is diversified.

It’s good to work with a private banker who is involved in the community, serving on nonprofit boards and actively volunteering. Bankers who are active in the community are generally well connected and have a lot of resources to help guide clients in any request.

Generally, private bankers are inquisitive and not afraid to ask questions about their clients’ personal finances and goals. Bankers also need to listen to their clients’ answers and be able to help put a solid plan in place to achieve their goals.

Insights Banking & Finance is brought to you by Home Savings Bank

How business owners benefit from using a private bank

Those who find value in the services of a private bank are typically people who have been very successful at running their business and most likely have many disparate business interests and concerns. A private bank supports these business owners as a resource to help manage the varied financial aspects of their professional, and often their personal, lives.

“Private bank clients tend to have unusual or sophisticated financial needs,” says Ted Gouza, senior vice president, private banking region manager at the Huntington Private Bank, which is part of Huntington Bank. “They’re involved at a high level with multiple companies, usually have entrepreneurial ventures such as startups, and their cash flows are different than those found in typical banking relationships.”

Smart Business spoke with Gouza about private banks, who should use them and what benefit they offer.

Why might working with a private bank make sense for business owners?

Business owners working with a private bank are able, when there is a need, to make a call and talk to one person who can quickly provide the direction and advice they’re looking for. They are connected to someone who is proactive, someone who knows them. When they call, they don’t need to explain who they are because they’re talking with someone who understands their full financial situation so that when they share information, the private banker is able to connect it to the bigger picture.

Private bank clients need a trusted adviser to call who can provide a full array of wealth management needs — loans, deposits, money management, financial and estate planning, and insurance. Private bankers ensure that all of those needs are addressed.

How does a private bank fit within someone’s existing adviser network?

A private banker becomes another aspect of a person’s financial network, serving in the role of quarterback on a financial team, connecting with a person’s existing accountant, attorney and commercial banker to help clients transact effortlessly.

A private banker doesn’t provide legal or tax advice, but they can direct clients to the right place when it’s clear a request requires different expertise. For example, recent changes to the tax law may prompt a conversation about what individual effect those changes might have. The private banker wouldn’t give direct advice on how to react, but would advocate in front of a CPA and accountant to work through the best way forward.

The benefit of a private banker is that they have knowledge of their clients’ entire financial situation — personal and business — and they’re connected to the rest of their clients’ network.

What special value does a private bank bring to a business owner?

Private bankers provide a consultative approach. They loop in the advice of additional partners to help counsel clients and identify and discuss opportunities as they arise. This applies to both the client’s personal and business finances.

A private bank is with a business owner through every stage of their financial lifecycle, whether they’re just starting a new business or coordinating a succession plan or liquidity event, and guiding them through whatever comes next.

How can prospective clients determine if a private bank can meet their needs?

During the review process, the conversation should touch on how often meetings with the banker should occur and what are the expectations for the relationship. Determine the level of expertise and capabilities of the private bank, as well as the approach taken when working with clients. The choice really centers on the client’s personal preference and the private bank’s ability or willingness to customize service to the client.

Expertise aside, it all comes down to the personal relationship. It’s important that the prospective client is comfortable with the person they’re working with and that the private banker fits well with the rest of the client’s financial team.

A private bank has the unique ability to coordinate the sophisticated financial business conducted by a select type of professional. The relationship, when working effectively, complements a client’s entire team of advisers.

Insights Banking & Finance is brought to you by Huntington Bank

How a bank can be a manufacturer’s strategic and trusted partner

For area manufacturers to keep up with the fast-paced economy, create jobs and grow in a competitive market, they need to be current with the times and well-connected in their communities.

“Manufacturers invest in the best equipment to make their products. But in order to take full advantage of that equipment, they’ve got to get customers in the door,” says Kevin Vonderau, Executive Vice President and Chief Lending Officer at Westfield Bank.

Among the many methods available to manufacturers to generate sales opportunities is a deeper connection with their bank.

“When the relationship is strong, banks can be an adviser to manufacturers rather than just providing nuts-and-bolts services,” he says. “Our connections within the community give us a broad perspective on how businesses, manufacturing and otherwise, are dealing with common issues.”

Smart Business spoke with Vonderau about how banks can help manufacturers overcome common business challenges and open a path to growth.

What are the aspects of manufacturing businesses that could be improved?
Generally, manufacturers could stand to be better marketers. One tool that they tend to underutilize in this effort is the web. It’s common for manufacturers to use the internet to find suppliers, why not use it to find sales?

Face-to-face interaction still has value, but it’s no longer typical for a sales force to go door to door and sell. Manufacturers need to better utilize the internet by creating a round-the-clock portal that’s more efficient and effective at finding potential clients.

If they haven’t already, manufacturers should build a modern website and use it to promote products and highlight recent projects. Include customer testimonials that speak to the business’s unique qualities and how they were able to solve their customers’ critical business problems.

Also, take advantage of formats where online communities can be formed — LinkedIn, Facebook and Twitter, for example. With the right approach, it’s possible to use these platforms to generate awareness and leads.

How can banks help manufacturers evolve their businesses?
Banks come into contact with many different companies, all of which approach common problems differently in the market, making a banker a centralized and valuable source of knowledge.

Bankers typically attend a variety of trade shows, are members of many industry associations and host or attend many community events. Manufacturers can leverage their banker’s experience and connections to grow their client base and expand their business knowledge.

Another key issue for banks is the fight against fraud and hackers. Banks are working to educate their clients on the tools and processes that are most effective in the prevention of fraud and mitigation of cyberthreats. It’s important for manufacturers to ensure their systems are safe so their proprietary information can’t be leaked to a competitor and that their financial transactions are secure.

What are the keys to a strong relationship between a manufacturer and a bank?
It comes down to treating a bank more like a partner than a service provider. They can help make valuable connections and uncover opportunities to grow the business, rather than just host a checking account.

Manufacturers are not unique when it comes to the challenges of common business stages, which is why banks are working to offer more education on events such as succession planning. Manufacturers should talk with their bank about the ways in which they can help them find success today and into the future.

Insights Banking & Finance is brought to you by Westfield Bank

Strong customer relationships lead to healthier businesses

You may have heard the song lyrics, “Make new friends, but keep the old. One is silver, and the other is gold.” This sentiment rings true for more than just personal relationships; it’s important in business, too. Business growth is dependent upon adding new clients, while keeping and expanding relationships with existing customers.

Smart Business spoke with Heather Wirtz, chief development officer at Richwood Bank, about how to leverage your relationships into financial success.

Why is customer loyalty so important?

Whether your company does retail sales with repeat opportunities or provides a service as-needed, customer loyalty is key for the best sales tool of all: recommendations through friends and family.

A customer might only buy a car every five to seven years or mortgage a home once, but that experience sets a memory that can provide referrals for years, even if you don’t see that customer for a decade. It’s the same for retailers that send coupons every week. If customers don’t have a great experience, feel the product was quality, like the selection etc., they’ll probably toss them out.

Treat every customer genuinely, regardless of appearance, financial status or ability. It sets the right tone to make the purchase journey a memorable one. A customer for life is possible when you make them feel as important to you as you are to them.

Where do you see companies struggle with customer retention and relationships? Why?

From a cultural perspective, your ability to build customer relationships and retain those relationships is directly tied to employee relationships and retention. The retention of customers is a lagging indicator of several efforts, but certainly if your employees aren’t engaged they won’t engage the customer. Equally, if too many faces change, your customers lose the motivation to get out of their car and see that special person.

Some companies overlook this dynamic, but it’s particularly critical when the business is built upon human interaction. To further explore this area, draw a square with customer relationships, employee relationships, customer retention and employee retention in each corner. Draw an ‘X’ connecting the corners, and then discuss the relationship of each item to each other item. By discovering where you’re weakest, you’d have one strategic initiative and deciding how to exploit where you’re strongest, you’d have another.

What other strategies can improve customer relationships?

Think about where you want to be in the relationship. When business owners work on their goals, they can try this exercise. Draw a triangle and divide it into three parts. At the bottom, in the largest base, is the vendor role. Think of the vendors in your life, such as cable, internet, Amazon, etc. That’s a relationship. The middle section is a consultant, such as a financial planner, doctor, contractor, trainer or decorator. The list is long, but all of them could move into the top of the pyramid: the adviser.

With vendors, you feel you have to decide and hope for the best with what you receive. There’s no expectations and in many situations, it’s merely transactional. With consultants, you look for their expertise and advice but still allow it to influence you or not. With an adviser, you bring the issue to them before you’ve made a decision and lean on them to guide you through it.

How do banks play a role in this aspect of business?

Many people don’t consider a bank anything but a vendor — a must-have, a transaction. But community banks should, at a minimum, be a consultant. That’s when people see value in that relationship and come to their banker with questions, possibly about a mortgage for a home they’re trying to buy, for example. The best banking relationships fall into that adviser role. Then, people would come to their banker prior to searching for a home and working out a budget, possibly even sharing their dreams of home design.

When considering your business, know where you fall in the relationship model — vendor, consultant, adviser — and if that’s where you want to be. Many businesses still thrive in the vendor box. If that’s where you fit best, then make sure that each transaction is the best experience it can be to continue gaining repeat business.

Insights Banking & Finance is brought to you by Richwood Bank

Automated payables platforms offer cost savings to those willing to switch

There are popular tools available to companies to automate their payment workflows, a presumably welcome relief to many accounts payables departments. Still, companies today tend to stick with what they know, making more than half of their payments by check.

“These are physical things that need to be printed, signed and mailed,” says Jim Altman, Middle Market Pennsylvania Regional Executive at Huntington Bank. “That’s not only time consuming, but given the technology available, difficult to monitor and needlessly costly.”

Companies looking for cost and process efficiencies are moving to electronic services — integrated payables platforms, virtual credit cards — to submit and control payments.

“Integrated payables services make vendor payment delivery, settlement and reconcilement easy,” he says.

Smart Business spoke with Altman about the effect of payment automation on companies’ accounts payables departments.

How would you characterize companies’ rate of adoption of these payment automation tools?

The rate of adoption of payment automation tools has been slow to this point largely because these services aren’t core aspects of most companies’ businesses. It’s more a utilitarian necessity. Businesses prefer to focus on activities that generate revenue, so products and services such as payment automation tend to get less attention.

Payment automation tools eliminate much of the heavy lifting in the accounts payables process and create a one-stop shop that processes payments while keeping all data, regardless of payment method, in one place.

Why does there seem to be a hesitance to change?

An integrated payables platform is essentially a website with a secure login access designed specifically for vendor payments. It features a configurable workflow process to maintain separation of duties for more fraud mitigation. Reporting is available through the interface so as transactions are made, their status is updated.

Adoption rates are high with newer companies that aren’t entrenched in a way of doing things. With older companies, the challenge is really just resistance to change — they’re hesitant to take on something that seems like a project. Finance staffs are squeezed for time, so getting them to welcome a new way of doing their jobs just seems like a task they don’t have time for. Overcoming that inertia is often tough.

However, what companies don’t take into account is that the simplicity of the new system means integration can be done in a matter of days, not weeks. The interface is very straightforward and uploading payment data is simple.

How might the integration of payment automation tools affect the costs of payment workflow and security?

A paper-based check payment system has costs for senders, such as maintaining a printer with magnetic ink and its paper stock, the cost of the mailing supplies, postage, and also time.

The manual processes and workflow are, compared to digital methods, difficult to track and control. There’s often no audit trail, especially at the transaction level. With automated workflow tools, an audit trail is automatically kept for any action taken on each payment. It’s a meaningful improvement in terms of ease of use and cost of service. It frees up time for an AP staff to take on more value-added activities.

Adding to the movement toward electronic-based systems is the need to mitigate fraud. Any check that is written should be protected with Positive Pay controls, and integrated payables services automatically provide this protection. But migrating payments from check to virtual cards is really changing the security dynamic because virtual cards have little fraud exposure.

These cards have a designated shelf life and dollar amount. They have security features that prevent them from being used just anywhere. As an added benefit, moving payments to virtual cards also bring rebates to a company that could outstrip the costs of the former manual process, effectively adding revenue to the AP department’s budget.

Insights Banking & Finance is brought to you by Huntington Bank

How a bank can be a manufacturer’s strategic and trusted partner

For area manufacturers to keep up with the fast-paced economy, create jobs and grow in a competitive market, they need to be current with the times and well-connected in their communities.

“Manufacturers invest in the best equipment to make their products. But in order to take full advantage of that equipment, they’ve got to get customers in the door,” says Krista J. Dobronos, Senior Vice President and Market Leader at Westfield Bank.

Among the many methods available to manufacturers to generate sales opportunities is a deeper connection with their bank.

“When the relationship is strong, banks can be an adviser to manufacturers rather than just providing nuts-and-bolts services,” she says. “Our connections within the community give us a broad perspective on how businesses, manufacturing and otherwise, are dealing with common issues.”

Smart Business spoke with Dobronos about how banks can help manufacturers overcome common business challenges and open a path to growth.

What are the aspects of manufacturing businesses that could be improved?

Generally, manufacturers could stand to be better marketers. One tool that they tend to underutilize in this effort is the web. It’s common for manufacturers to use the internet to find suppliers, why not use it to find sales?

Face-to-face interaction still has value, but it’s no longer typical for a sales force to go door to door and sell. Manufacturers need to better utilize the internet by creating a round-the-clock portal that’s more efficient and effective at finding potential clients.

If they haven’t already, manufacturers should build a modern website and use it to promote products and highlight recent projects. Include customer testimonials that speak to the business’s unique qualities and how they were able to solve their customers’ critical business problems.

Also, take advantage of formats where online communities can be formed — LinkedIn, Facebook and Twitter, for example. With the right approach, it’s possible to use these platforms to generate awareness and leads.

What are the outside forces in the Greater Akron market that could be considered obstacles to manufacturers’ evolution?

Not as much time is spent training the next generation of tradesmen. And given the rate of retirement of those employed in the industry, that’s an issue.

Also, according to the Bureau of Labor Statistics, Akron is seeing employment in the manufacturing segment decline. Contributing to that trend is the rise of automation and losing ground to countries that are able to produce goods cheaper.

How can banks help manufacturers evolve their businesses?

Banks come into contact with many different companies, all of which approach common problems differently in the market, making a banker a centralized and valuable source of knowledge. Bankers typically attend a variety of trade shows, are members of many industry associations and host or attend many community events. Manufacturers can leverage their banker’s experience and connections to grow their client base and expand their business knowledge.

Another key issue for banks is the fight against fraud and hackers. Banks are working to educate their clients on the tools and processes that are most effective in the prevention of fraud and mitigation of cyberthreats. It’s important for manufacturers to ensure their systems are safe so their proprietary information can’t be leaked to a competitor and that their financial transactions are secure.

What are the keys to a strong relationship between a manufacturer and a bank?

It comes down to treating a bank more like a partner than a service provider. They can help make valuable connections and uncover opportunities to grow the business, rather than just host a checking account.

Manufacturers are not unique when it comes to the challenges of common business stages, which is why banks are working to offer more education on events such as succession planning. Manufacturers should talk with their bank about the ways in which they can help them find success today and into the future.

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