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Wednesday, November 16, 2016
Have you ever come across this problem? Friends of yours are having relationship troubles. One complains that the other partner never talks to them anymore, and that they never discuss problems. The other says…. Exactly the same thing.
You just wish that one of them would take the initiative and start talking to the other.
Unfortunately, it takes two to tango. If you want a good relationship, you both share some responsibility for communicating with each other.
And since this is an email about financial management of your business, not personal relationships, what works for couples also holds true for your company and your bank.
Business owners often complain about their relationship with their bank. It’s almost always the same issues: No one’s available to answer questions… Their bank manager shows no interest in the business….. When you need help urgently, they’re just not responsive.
But instead of complaining, why not pick up the phone and talk to them?
If you want a relationship with your bank manager, you can’t rely on them to do all the heavy lifting. You need to work at it, too.
Make your bank manager your best friend.
Don’t keep them in the dark – let them know what’s going on with your business on a regular basis. Give them good news as well as bad, and send them your monthly management accounts.
Invite them for meetings and to visit your company. They’ll usually come.
They hate surprises, so if you think you’re about to hit a bad patch and need their support, get in touch sooner rather than later. They’ll be more inclined to help if they can see that you have a long-term plan for your business. It’s in their interests to lend you cash, so help them help you.
Find out what networking groups are in your area. Many may include local bank managers – it’s a great chance to meet them informally and start building relationships.
Size could be an issue, of course. Most banks will not have dedicated relationship managers for small-sized companies, but what they consider small varies. Generally, the lower limit is a turnover of £1-£2 million. Some, such as Metrobank, have no lower limit and will be happy to help you out no matter the size of your business.
At Insight Associates, we make a point of nurturing relationships with local banks because it’s so important both for ourselves and for our clients. For example, we get to know local bank managers and invite them to our offices so they can see first-hand how we work.
Having an open line to your bank manager will always pay off in spades.
In a previous email I mentioned a customer who had complained about their banking. We solved that by moving them to a bank where we already had a relationship, helping them to get that too.
Many people consider their bank manager their enemy, but they don’t have to be. They can be your business’s biggest friend and supporter, giving you great business advice, helping you tide over difficult periods and smoothing out issues with your banking quickly.
So don’t leave it to your bank manager to reach out first… The relationship is far too important to leave to them!
Wednesday, November 09, 2016
Wherever the president of America goes, he (or soon, possibly, she) is accompanied by a military aide carrying the “nuclear football”. This is a metal briefcase in a black leather “jacket” with the launch codes for nuclear weapons.
I carry my briefcase myself – no military aide – and admittedly it’s not quite nuclear weapons, but I also never, ever leave the office without my own set of codes.
To be precise, I carry a bag full of different security devices to access each of the major banks’ online banking facilities, such as Barclay’s PINsentry and HSBC’s SecureKey. This means that if our clients need me to access their accounts for any reason, I can do so even on the go.
Without going into the details, I had a fair amount to tell them – because there are wide variations between the systems.
And that’s true for almost every aspect of Internet banking.
As you’ve probably noticed, banks are working hard to get their customers online as much as possible. They are closing hundreds of branches all over the country, a process that is likely to accelerate over the next decade.
It makes sense for them as it’s a much cheaper way of doing business.
It can also work for you because it’s quicker, more convenient and flexible.
But – and it’s a big but. Not all internet banking services are the same. In fact, there are lots of major differences. And they will not all equally suit your business.
Here are some things to consider:
- What kind of payments can you make? Are there any restrictions on transaction sizes and do these fit your needs? What about foreign payments, if you do business with companies abroad?
- Security: How secure is their system and what guards does the bank have in place against fraud?
- For example, how easy is it to log onto your online account? Think about how you control access. Do they use a dongle, PIN sentry or another system which has to be physically plugged into a USB port?
- Connected to that…..
- ...Authorisation: How easy is it to authorise payments? Do you need dual authorisation or does the bank require just one person to allow a transaction to take place online? This can be important because you could unwittingly be giving a huge amount of authority to a relatively junior member of staff.
- How much control do you have over your online users? If multiple users need to access your online account, can you give them different levels of access? Some banks, for example, will allow certain users to look at statements but not make payments. Others are an-all-or nothing proposition.
What’s important is that, unlike most businesses, you think carefully about your bank’s online services, and whether they really do fulfil your needs. If not, it’s time to go shopping for a new bank.
Monday, November 07, 2016
Banks...the institution we love to hate above all others.
Indeed, I had one client who complained about his company’s bank incessantly. The customer service was bad, their Internet banking didn’t work and nobody took time to find out about him and his business.
One day I stopped him in mid-flow.
“Our relationship with our own bank couldn’t be better. Everything happens quickly, we can speak to a manager whenever necessary and their local manager even came to visit us to learn more about our business.
“If you don’t like your bank,” I asked, “why not find another one that will offer your business the same level of service?”
I even offered to help him move, as we have done for several clients, because a good relationship with your bank is crucial for smooth financial management.
He stared at me blankly. It had never occurred to him to move.
We often like to complain about our bank, but the trouble is we seldom do anything about it.
Here are some factors to consider:
- What facilities do you need? Will you be cashing cheques, or depositing large sums of cash frequently? Do you need a deposit box? If so, you’ll need a bank with a physical presence near your headquarters. As I said, this is no longer a given for many banks – and over the next decade, will become even rarer….
- Internet banking: Banks are doing more and more of their business online. If this is a facility you intend to use often, you must know that their security measures are up to scratch. I’ll go into this in more detail soon so watch out for the next blog.
- Foreign payments: Do you conduct businesses overseas? If so, what are the fees like for foreign payments? This area is becoming much more competitive.
- Charges: How much does the bank charge and what for? Make sure you understand all the charges because banks can be slippery about this.
- What kind of relationship do you want? Do you expect to have a relationship with your bank manager, for example? Depending on your size, not every bank will be able to offer this.