How to efficiently manage your technology assets

In today’s environment, technology is everywhere — from tablets and smartphones to medical and manufacturing equipment. That’s created an imperative for companies to carefully track their endpoint devices to ensure they are updated with the most recent software. It necessitates working with an experienced partner that specializes in providing online asset management capabilities and facilitating a successful refresh strategy.

“Companies with many employees are managing a lot of endpoint devices that come in, go out and possibly change hands as frequently as each month,” says Jim Altman, Middle Market Pennsylvania Regional Executive at Huntington Bank. “When software licenses and device warranties end, a company must quickly and efficiently retrieve and replace or update those devices and software applications. That process is made easier through the implementation of a tracking system.”

Smart Business spoke with Altman about how companies can manage their technology assets throughout their lifespan.

What should businesses take into account from the day hardware is bought or leased?

A good first step is to estimate, as accurately as possible, when that technology will be due for an upgrade — what is the useful life of that equipment and when will it need an upgrade? If, for example, a device is on a depreciation schedule of five years, but the actual useful life of it is only two, the company won’t be ready to replace the device because it’s on the books for another three years.

Also, consider the replacement process strategy. Have a plan to swap out the assets, which are proliferating exponentially — consider that, on average, each employee may have three active devices at one time. With so many devices to update and replace, it becomes easy for chaos to be created.

Given all of this, don’t underestimate the value of leasing technology assets to manage the obsolescence factor and avoid having too much capital tied up in equipment.

What are the possibilities for streamlining and establishing efficiencies?

Companies no longer maintain devices that originate from one manufacturer and are purchased at one time. Tracking them requires a platform that enables a company to keep an active catalog of all devices, who has them and where they are in their lifecycle to more easily identify problems with certain model numbers, so users can be called in to have those issues addressed. It also allows a company to incrementally replace devices that have aged-out of their useful life, rather than all at once.

While tracking hardware lifecycles is critical, staying on top of the software maintenance schedules of those assets is equally as important. Have a mechanism to track versions throughout the network to maintain the most recent security updates, the newest user experience and compatibility as people work together and share information.

Companies of any size with any number of company-owned devices should track their assets. While a company with 20 to 30 assets doesn’t need a robust platform, as the device count rises and organizations spread out through remote working arrangements and travel, the need for an advanced solution increases.

Generally, what should companies expect in terms of device lifecycle?

Obsolescence must be carefully estimated, but for a quick reference, keep in mind that smartphones have a useful life of two years, laptops up to four, desktop computers up to five, storage devices and servers will last for four years before needing an upgrade, mainframes can go five years, and network phones and switches can last as long as seven years. Of course, this is just a generalized guide. Companies should review their hardware to determine a more accurate sense of the replacement schedule.

The importance of monitoring and tracking devices and software can’t be overstated. There are cases in which a device is still active beyond its warranty or maintenance contract, which can create costs that are hidden within an organization. Think about where the technology is going to be, not where it is. Accurately depreciating devices can be a major cost saver both in terms of replacement and maintenance costs, and productivity.

Insights Banking & Finance is brought to you by Huntington Bank

Work with your bank to understand the benefits of treasury management

Treasury management services provide a multitude of ways for companies to operate more effectively, says Jennifer Bidlingmyer, Vice President and Division Manager at Home Savings Bank.

The first step to realizing the benefits of these tools is to initiate a conversation with your bank.

“Your banker should be a consultative partner for your business,” Bidlingmyer says. “When you keep your bank informed about what’s happening in your company and about any problems that you may be encountering, it allows them to identify treasury management services that alleviate those problems and also creates a robust working relationship.

“The combination of your knowledge of your business and your bank’s expertise in identifying products and services that are available to address your needs is powerful and puts you in a stronger position moving forward,” she says.

Smart Business spoke with Bidlingmyer about how to identify and better understand the right treasury management services for your business.

What are the most important ways in which treasury management services can benefit a business?
Cash flow is the lifeblood of any successful business. It seems simple enough to know your company’s account balances at any given time, but the operation of a business with a large number of customers, suppliers and vendors can make this a more complicated process.

Treasury management services, such as Automated Clearing House (ACH), provide tools to electronically schedule when funds are to be moved and then track those transactions. Reports can be generated at any time to keep decision makers updated in real time.

These tools also include controls that allow a company to manage who has access to its accounts. When these responsibilities are closely managed, it reduces the risk of fraud or inadvertent mistakes made by people who don’t typically manage the accounts. These controls provide the stakeholders of the business with confidence that your financial systems are in good working order.

Another helpful tool that companies utilize to better manage their funds is remote deposit capture, which acts like a bank in a box within a business. Users can make deposits electronically using bank-provided desktop scanners to upload deposits to a secure web portal, eliminating the need to drive to the local bank branch office to physically make the deposit.

Even if it’s a short drive to the bank, if the trip is made every day, the time spent on the road can quickly add up. This takes personnel away from other important matters that could otherwise be addressed during that lost time.

What about companies whose management is still skeptical about using technology in their banking?
As with many aspects of life and business, change is not always easy. Some companies hesitate to change processes even if it would make their company more efficient. Other business owners may be reluctant to use technology in their banking due to fraud or security concerns.

Treasury management users receive ongoing training and education to help prevent any internal or external fraud. Treasury management also allows companies to monitor their accounts in real time, which can be helpful in tracking any fraudulent transactions that may arise.

Dual controls are in place on all accounts to add an extra layer of security to help ensure that businesses are protected from being compromised. These dual controls require more than one user to initiate any online transactions and to fulfill online payments.

Working together with your banker to identify the best services for your business’ needs can help you develop a plan to function in a way that enables your company to reach its full potential.

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

Leaders must be ready to disrupt in order to remain competitive

Entrepreneurial spirit can inspire a company to pursue tremendous creativity and innovation, so long as that company has a leader who is firmly behind those lofty endeavors, says Kurt Kappa, Senior Vice President and Market Leader, Cuyahoga County at Westfield Bank.

“Entrepreneurs have larger goals in mind than simply owning a business,” Kappa says. “Their vision is to craft a plan that can disrupt an entire industry. The risks are greater, but so is the reward. The first step to building this type of enterprise is the creation of a culture that not only allows, but encourages employees to approach problems from a different perspective.”

This type of mindset is more common in an age when everything you thought you knew about your industry can change quite rapidly. As business leaders, you must be continuously thinking about the next new product or service for your customers, or risk falling behind a competitor that gets it to market first.

Smart Business spoke with Kappa about how to bring a genuine entrepreneurial spirit to your company.

How would you define entrepreneurial spirit?
Leaders who bring an entrepreneurial approach to their business are optimistic by nature and tend to view events as opportunities rather than threats. They are constantly looking for a better way to build a product or provide a service and they are willing to take calculated risks in the effort to elevate their performance.

And perhaps most importantly, this type of leader has an unwavering drive to execute. While there is excitement in seeing a plan take shape, the real joy comes from the steps that follow to implement the new initiative.

What are the challenges of leading with an entrepreneurial mindset?
The day-to-day responsibilities of running your business can be one of the biggest hindrances to growth. When you delay a work session geared toward future planning to respond to a more urgent matter, there is no immediate impact. As you continue to postpone that work, however, you restrict your company’s ability to evolve. As the market moves to the next big thing, you may find that your company is not as prepared as it could have been to meet those new customer demands.

Make it a priority to create a dialogue about your long-term future and to feed your team’s creativity. Reading can be a very useful practice for leaders looking for inspiration in their work as you can see how other entrepreneurs found innovative solutions to difficult problems. Study companies outside your industry and look for parallels that can be drawn to some of the challenges you face in your own business.

How do you get employees involved in this effort?
Provide your team with a broad overview of what you want to accomplish. If there are certain areas of the company that don’t require change, make that clear from the start. This enables people to direct their energies toward segments that would benefit most from a new approach. Once parameters are established, employees and stakeholders should feel empowered to identify growth opportunities within these areas.

Keep in mind that your employees work with customers on a regular basis. Ideally, this experience has opened their eyes to new ideas that may not have occurred to you or your management team. If they know they have the resources and the support to try something different, but within the established parameters, it increases the odds of reaching a successful outcome that helps your company.

How can your bank help your company be more entrepreneurial?
Bankers can be a valued partner in your growth plan along with your accountant, attorney and other trusted advisers that your company relies upon for expertise. Each of these professionals works with business leaders in different industries and has gathered a wealth of knowledge on how to approach problems.

That’s a valuable resource that should be very useful as you look to strengthen your market position. No matter how long a business or industry has been around, it can all change very quickly. Your future depends on your ability to put your company in the best position to respond to those changes.

Insights Banking & Finance is brought to you by Westfield Bank

SBA loans can be a smart alternative for a new, growing business

When you’re a small business owner looking for a loan, you may have questions about where to start. If this is the first time trying to secure a loan for your business, you may want to consider going after a U.S. Small Business Administration (SBA) loan for your business.

“While the SBA is not a fit for all businesses or circumstances, it can be a valuable financing alternative for startups, businesses undergoing significant acquisition or expansion, or businesses with a lack of collateral,” says William Dickson Jr., Senior Vice President and Commercial Lender at Northwest Bank.

“The time and cost of SBA financing can be easily outweighed by the benefits of longer terms and more flexible structures than conventional financing. When it comes to getting an SBA loan, preparation is key and working with experienced SBA lenders will make the process much easier.

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

What are some important things to consider when looking at SBA loans?
The SBA provides a variety of finance programs that can be particularly valuable for small businesses seeking funding for a startup, acquisition, significant expansion, under-collateralized loan request or higher risk loan request.

As with any loan request, preparation is key to success. The more detailed and well thought out your business plan is and the more details of your business and industry experience that you can provide, the easier the process will go.

Lenders also want to know and understand how you plan to use your loan, another important, but often overlooked consideration. It is also highly recommended that you meet with commercial lenders who have SBA-lending experience.

How does your current status or the nature of your plan impact whether an SBA loan is right for your company?
There are a number of factors that can determine whether or not an SBA loan is right for you.
Businesses under three years old are still considered new and therefore a higher risk, which may require your loan request qualify for an SBA enhancement.

An SBA loan might be a good solution if you’re looking to purchase an existing business with minimal collateral because it can help offset any lack of required collateral.

SBA loans can also provide term and structure flexibility. For example, where a conventional loan may finance an equipment loan for five years, under certain situations, the SBA might allow a business to finance equipment for up to 10 years. This can be a significant improvement to your cash flow.

If an SBA loan is a fit for your needs, what are some keys to maximizing its value?
Preparation is truly one key to maximizing your loan request; the more time you dedicate to crafting your loan request and preparing for questions that may come up, the better chance you have in obtaining the proper financing.

Other important aspects of the preparation process include addressing your ideal target market, trade area, location, any local competition, the number of existing employees or any new employees who could be hired as a result of the loan.

What are some misconceptions people have about SBA funding?
People often think the process is time consuming, that there’s too much paperwork or that SBA loans are expensive.

This is where it’s vital to work with experienced SBA lenders. They can walk you through the process and complete the necessary documentation in a timely manner. There’s really no more paperwork than most financing requests, and most SBA programs allow your fees and associated costs to be built into the loan request.

Spreading the fees and costs out over the life of the loan, especially if the loan terms are longer, actually make SBA loans a very competitively-priced financing alternative.

Northwest Bank is Member Federal Deposit Insurance Corp. (FDIC), Equal Housing Lender

Insights Banking & Finance is brought to you by Northwest Bank.

Why you can’t afford to wait to address concerns with your bank

Business owners have numerous responsibilities that must be fulfilled in order to enable their companies to run at peak efficiency.

This may involve managing day-to-day operations, meeting with potential new customers, working with employees to put them in the best position to help your company grow or finding new ways to meet the needs of existing customers.

Whatever the current status of your company, it’s likely you have very little downtime in the course of a typical day.

Time is valuable, so you want to maximize the value of each task on your calendar. This includes external relationships that your company has with partners like your accountant, your legal counsel or your bank.

If you feel like you’re doing too much of the heavy lifting to keep your financials in order and not getting enough support from your bank, it’s time to assess the relationship and perhaps even consider making a change.

Smart Business spoke with Patrick Paoletta, Vice President, Commercial Lending at Northwest Bank, about how businesses can evaluate the existing relationship with their bank to ensure they’re getting the most out of the available services.

What are some tried and true methods to evaluate a bank’s client services? How do you ensure honest feedback?
Reflect on the recent experiences you’ve had with your bank. Most companies have one person who serves as a primary link between the company and the bank.

Consider the following questions: Has your banker taken the time to develop a relationship with your business and understand your financial needs and challenges? Do you consider your banker a trusted adviser? Does your banker take a personal interest in your business and provide solutions to match your needs? Does your bank’s technological capabilities meet your company’s needs when it comes to treasury management, reporting and other services?

Bring in your financial team and anyone else who has regular interaction with your bank and gather everyone’s feedback as to their sense of your company’s working relationship with your bank.

What can you do to help your bank provide a higher level of service?
Request periodic meetings with your banker and time them to coincide with the release of new financial information or announcements of new strategic initiatives so you can have meaningful conversations about the growth of your company.

When there are tangible items on the table to be discussed, it makes it easier to review where you’re at and assess your bank’s ability to help you maximize these opportunities. As a leader, your goal is always to develop solutions to keep momentum moving forward. If you run into any financial challenges along the way, don’t wait to talk to your bank. Schedule a meeting promptly so you can work together to develop a solution.

To make the most of your bank’s services and your partnership, invest the time in maintaining a strong relationship with your bank. Expect your bank to be responsive to your financial needs and be a trusted business partner.

What’s the best approach if you have concerns about the level of service your bank is providing?
If there are concerns, you should set up a meeting with your bank and address the items that have become a problem.

When you’ve evaluated your relationship and found your overall experience to be negative, you may want to consider exploring new relationships with other financial institutions. Developing relationships with other banks can help you determine if there are better solutions elsewhere.

Northwest Bank is Member Federal Deposit Insurance Corp. (FDIC), Equal Housing Lender

Insights Banking & Finance is brought to you by Northwest Bank

Leaders must be willing to change in order to remain competitive

Entrepreneurial spirit can inspire a company to pursue tremendous creativity and innovation, so long as that company has a leader who is firmly behind those lofty endeavors, says Jeff Honaker, Senior Vice President and Commercial Loan Officer at Westfield Bank.

“Entrepreneurs have larger goals in mind than simply owning a business,” Honaker says. “Their vision is to craft a plan that can disrupt an entire industry. The risks are greater, but so is the reward. The first step to building this type of enterprise is the creation of a culture that not only allows, but encourages employees to approach problems from a different perspective.”

This type of mindset is more common in an age when everything you thought you knew about your industry can change quite rapidly. As business leaders, you must be continuously thinking about the next new product or service for your customers, or risk falling behind a competitor that gets it to market first.

Smart Business spoke with Honaker about how to bring a genuine entrepreneurial spirit to your company.

How would you define entrepreneurial spirit?
Leaders who bring an entrepreneurial approach to their business are optimistic by nature and tend to view events as opportunities rather than threats. They are constantly looking for a better way to build a product or provide a service and they are willing to take calculated risks in the effort to elevate their performance.

And perhaps most importantly, this type of leader has an unwavering drive to execute. While there is excitement in seeing a plan take shape, the real joy comes from the steps that follow to implement the new initiative.

What are the challenges of leading with an entrepreneurial mindset?
The day-to-day responsibilities of running your business can be one of the biggest hindrances to growth. When you delay a work session geared toward future planning to respond to a more urgent matter, there is no immediate impact.

As you continue to postpone that work, however, you restrict your company’s ability to evolve. As the market moves to the next big thing, you may find that your company is not as prepared as it could have been to meet those new customer demands.

Make it a priority to create a dialogue about your long-term future and to feed your team’s creativity. Reading can be a very useful practice for leaders looking for inspiration in their work as you can see how other entrepreneurs found innovative solutions to difficult problems. Study companies outside your industry and look for parallels that can be drawn to some of the challenges you face in your own business.

How do you get employees involved in this effort?
Provide your team with a broad overview of what you want to accomplish. If there are certain areas of the company that don’t require change, make that clear from the start. This enables people to direct their energies toward segments that would benefit most from a new approach. Once parameters are established, employees and stakeholders should feel empowered to identify growth opportunities within these areas.

Keep in mind that your employees work with customers on a regular basis. Ideally, this experience has opened their eyes to new ideas that may not have occurred to you or your management team. If they know they have the resources and the support to try something different, but within the established parameters, it increases the odds of reaching a successful outcome that helps your company.

How can your bank help your company be more entrepreneurial?
Bankers can be a valued partner in your growth plan along with your accountant, attorney and other trusted advisers that your company relies upon for expertise. Each of these professionals works with business leaders in different industries and has gathered a wealth of knowledge on how to approach problems.

That’s a valuable resource that should be very useful as you look to strengthen your market position. No matter how long a business or industry has been around, it can all change very quickly. Your future depends on your ability to put your company in the best position to respond to those changes.

Insights Banking & Finance is brought to you by Westfield Bank

What to consider before selling, exiting your company

All business owners eventually face the tough, unavoidable task of deciding how to transition out of their company.

“Exiting a business is a major step that requires years of preparation to execute in a way that leaves owners confident with the future legacy of the company they have built over many years and with enough income to carry them through the next stage of life,” says Jim Altman, middle market Pennsylvania regional executive at Huntington Bank.

He says making the best decision requires seeking advice from those with different points of view on the best strategy, rather than relying on emotions to guide the decision — a fault of many in the position. But the key is to evaluate the objectives that matter most for owners and their families, and to prioritize a plan accordingly.

Smart Business spoke with Altman about exit planning, and options available to owners once a liquidity event occurs and is complete.

What are the more common ways in which business owners exit their companies?

For owners who have family members working in the business who are experienced and qualified to run the company, it’s logical, as one viable option, to transfer the business to them as part of a generational transfer. But sometimes emotions tied to family supersede making the best business decision, and an owner may decide to transfer ownership to a family member who isn’t ready. That decision often puts the company’s future in doubt.

Selling to an independent party offers one attractive option to consider and the most often used for owners to seek a competitive bid and maximize their return. This also allows the seller to receive immediate funds after a sale if no seller note is involved.

Another option is to sell the company to employees under an employee stock ownership program. After tax considerations, it could be one of the most lucrative choices for owners and most favorable to employees. It also creates an opportunity for family to have an ownership stake in the business while the owner can continue to draw money out of the company over time in the form of a seller note or ongoing management fee.

The main thrust for owners is to understand their priorities. It could be important to some owners that family stays attached to the business. Other times, owners could prioritize getting the most money they will use to fund retirement or their next investment. All that matters is that owners consider what is in their best interest and have a plan to achieve it.

Who should be part of the discussion as business owners consider their exit strategy?

There should be at least a trio of people involved: an accountant, legal adviser and banker. All three bring slightly different, but very valuable, perspectives.

Additionally, exiting owners should seek opinions from other people in their network who have sold companies and ask them how they came to their decisions, what happened and whether they’d do anything different. Even if the choice is clear, it’s still a good exercise to understand the pros and cons of each option. This is likely the only time business owners will sell their company, so it’s critical to gather as much information as possible during the process.

What should business owners consider about what happens after the sale event?

Owners should consider their next-stage investment strategy while they put together an exit plan. Too many owners don’t consider that. A full financial plan can help determine the best investment strategy and it will account for the individual’s priorities — whether it’s an immediate return so there’s money to spend on living in the moment, or having money to pass to the next generation.

There will come a time when owners can no longer run their business. Start planning the exit well ahead of that time. Consider the succession of the business and what to do with the proceeds. Revisit the exit plan annually and make adjustments when circumstances change. Seek out the opinions of many people, especially those who have sold their companies, and don’t let emotion trump best judgment for all in the long run.

Insights Banking & Finance is brought to you by Huntington Bank

Study the landscape to find, face common business challenges

“In the business world, there are threats around every corner,” says Jim Altman, middle market Pennsylvania Regional Executive at Huntington Bank. “And in some ways, the level of volatility has increased in recent years.”

He says areas such as payments, whether making or receiving; data protection; interest rate changes; and currency instability have become a greater concern for many businesses. Fortunately, he says, there are steps businesses can take to address those concerns.

Understanding the good and bad of each business decision is inherent in most service areas of commercial banking and financial management that often manifests in something as basic as a conversation between the representative and the client. Moreover, there can be much to gain from a knowledgeable banking team engaging in a formal assessment of factors contributing to a business’ performance in the market.

Smart Business spoke with Altman about areas of volatility and how to move smoothly through them.

How is payment fraud affecting businesses?

Companies are typically reactive when it comes to payment fraud, responding as incidences happen to mitigate the impact of that event. That’s unfortunate because it takes days or weeks to understand that fraud has occurred.

Most companies believe that payment fraud will occur at some point, but they often don’t believe they can stop it from happening. There are, however, preventative measures companies can put in place to reduce the probability of a fraudster’s success and control the impact. Banks, for instance, have a treasury management suite of products designed in part to help secure ingoing and outgoing payments.

What are companies doing to fight data breaches?

Businesses are becoming more proactive as they attempt to protect themselves against data breaches, but often aren’t mobilizing until there’s a security breach.

Cyberbreach techniques are dynamic and continually evolving. As a result, there isn’t one tried-and-true approach to preventing a breach. Many proactive companies turn to cybersecurity insurance to soften the blow of a breach. The process of acquiring insurance often includes a risk assessment so companies can better understand where risk exists within their systems, giving them a chance to shore up those weak spots.

What might happen with interest rates?    

It is likely that the Federal Reserve’s early indication of two interest rate increases this year will impact commercial banking. If rates start to climb, the expectation is they’ll rise quickly. Companies that don’t budget for interest rate increases could experience higher than anticipated costs.

Banks can hedge the variable component of interest rates. That may not mean getting the extremely low interest rates that the U.S. has had in recent years, but companies will at least know what they’ll pay.

How is currency volatility affecting businesses?

When it comes to currency volatility, much like hedging interest rates, companies can lock in a price for a foreign currency that’s experiencing volatility, achieving a great measure of consistency and predictability in an uncertain market. In fact, the strategies to offset currency volatility do not rest with just hedging. There’s a lot companies can do when transacting with customers abroad to mitigate losses. For instance, companies can conduct business transactions in U.S. dollars as well as foreign currency to insure the most favorable payment option is always available depending on the most current environment, which can regularly fluctuate. And they can implement insurance programs to guard against losses related to domestic and foreign buyers.

Who can help navigate these challenges?

Companies can find aid in a knowledgeable banking partner that can help find and assess a business’ most pressing concerns, manage them and put solutions in place to mitigate them. In today’s environment, business owners should expect nothing less.

It’s important that companies assess their financial provider on its ability or willingness to help. Otherwise, companies are missing the chance to work with an organization that could do more to protect their business.

Insights Banking & Finance is brought to you by Huntington Bank

Get your bank involved in plotting your company’s growth strategy

Financial projections that are objective and realistic go a long way toward earning the trust of your bank, says Kurt Kappa, Senior Vice President and Market Leader, Cuyahoga County, at Westfield Bank.

“You want to under promise and over deliver,” Kappa says. “If you put together a projection that says the sky is the limit just to look good on paper for your bank and then you don’t hit those numbers, it will reflect poorly on your company. Your bank will want to know where you went wrong and why you fell short of your stated goals.”

A better approach is to set realistic financial projections with clear objectives. This approach will demonstrate to your bank that you have strong financial acumen and in the process, strengthen the relationship.

“Your bank will view your company as one that has its finger on the pulse of what’s happening and feel confident in your leadership and decision-making process,” Kappa says.

Smart Business spoke with Kappa about how to engage your bank in the growth of your business.

What are some key things to think about before you meet with your bank?
Make sure you are fully prepared when you meet with your bank. Have current financial statements, projections and a plan in place of what you want to achieve.

Have everything lined up and ready to go, along with a detailed request that you can present to your bank. If there are any issues in your financial statements, be prepared to provide an explanation. Being transparent with your bank will provide you with the best opportunity to achieve your goals.

Where is a good place to start when developing your growth plan?
You should have a plan set forth about six months before the end of the year that enables you to strategize for tax planning purposes. Work with your banker and CPA so they can make recommended adjustments for year-end planning and accurately forecast your needs.

When formulating a growth plan, your bank will not base its decision on where you are today, rather on where you were last year. Demonstrating cash flow with projections will allow your bank to put a deal together that is customized for your needs.

The importance of working as a team is that for every action, there is a reaction. Every time you do something on the accounting side, there is a reaction on the banking side that might otherwise get missed. You may be hitting a covenant that the bank put in place for your loan, but you’re not thinking about the expansion that you’re planning at the end of the quarter.

What are you going to need in the way of financing from the bank to manage that expense? Forming a team of trusted advisers will ensure that fewer things are missed and poise your company for future success.

How much value is there in having your bank visit your business?
There is more value in visiting a company than there is in looking at financial statements. You see employees and how they interact with each other. Are they happy employees? If you go to a manufacturing company on a Wednesday at 10 a.m. and there is no work going on, you know there is some kind of an issue.

A visit to the physical location provides a better sense of how the company is operating. An on-site visit provides context and valuable insight that can be factored into the discussion the bank has about the support it can offer your company.

How important is collateral?
There are some banks that only care about cash flow and don’t worry about collateral. Banks that do use collateral will typically want to be in first position in order to protect their security interests. They won’t look favorably at taking a second or third position on a piece of property that has already been used as collateral with another bank.

Insights Banking & Finance is brought to you by Westfield Bank

It’s never too early to start planning for the next tax year

Tax reform is on the agenda in Washington, D.C., but it’s difficult to know what form it will take or what impact it will have on both U.S. businesses and taxpayers, says Drew Shealy, Vice President and Director of Trust & Portfolio Management at Home Savings Bank.

“You can only proceed on what you know for sure,” Shealy says. “Communication is key, so make sure the people representing each facet of your financial plan are collaborating and looking out for your best interests. From a small business standpoint, the biggest takeaway thus far is that the federal government is looking to ease regulatory burdens on small business owners.”

President Donald Trump has already inked an executive order to repeal two regulations for every new regulation added to the books.

The intent is to spark job and wage growth and free up capital for companies to expand through acquisition and infrastructure spending. As you assess your own personal financial outlook, it’s important to consult regularly with your financial planner, your legal counsel and your accountant or CPA to make sure you’re all on the same page.

Smart Business spoke with Shealy about best practices to prepare yourself for the next tax year.

Where is a good place to begin your tax planning?
You can start by making sure that your quarterly estimates are on pace with your income levels to avoid overpayment, thus making an interest free loan to the government; or underpayment, wherein you expose yourself to penalties and interest.

A lot of folks get into a situation where they miss something and it paralyzes them. They get so worried about what’s happened that they end up doing nothing about it. Some even believe the situation will resolve itself by the end of the year.

But the best thing you can do is to talk to an adviser or a professional to get the problem rectified. It may cost a little to reach a solution, but it’s a far better way to go than to ignore the problem and hope it goes away.

What role can an adviser play in your tax planning strategy?
If you don’t make time for regular conversations with each member of your financial team, you’re missing out on valuable advice and perspective. Each person brings a different set of knowledge and expertise to the table.

You may think that your question is not worth bringing up, but it never hurts to ask. The sooner you let your adviser know about what’s happening, the better off you’re going to be. Financial professionals can offer you advice and help you plan for a change in your investment portfolio or your tax strategy.

If you find that time gets away from you and you forget to make these appointments, use your quarterly estimates as a tool to hold yourself accountable to these check-ins.

What if you have recently made changes on your financial team?
If you have changed banks or have a new investment adviser helping you, it is important to let them know if you have loss carryforwards. Loss carryforwards can often be applied in the current tax year to offset gains on appreciated assets that are no longer performing.

If your advisory team is aware of your history and informed about your tax loss carryforwards, it will allow for more flexibility in the management of your assets, including rebalancing, to reflect your investment objective.

What are some tools that can help you with your tax strategy?
Financial planning software or online aggregators can assist in the organization of your entire financial life in one spot.

They often provide details as to what your overall portfolio allocation looks like and help your advisers plan for your future financial needs, as well as store documents for important matters such as estate planning.

It’s also important to look at appreciated securities versus cash. Find opportunities to shift appreciated assets from yourself to whomever it is you’d like to support, whether it’s your church or another local philanthropic organization.

Donating these highly appreciated securities may help mitigate the tax burdens you might have if you were to liquidate those assets and use the proceeds for yourself.

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