NFIB

Check Your Costs of Banking
04/ 15/ 2002


Over the past few years, banks have been increasing their profitability by continually raising fees for specific services, such as checking account fees, wire transfer fees, ATM charges, overdraft fees, etc. In today's Workshop, Jeffrey Moses discusses ways to cut down many of the "hidden" banking costs that can mount up for a business.

Small businesses, which often operate on relatively small profit margins, are especially vulnerable to the recent tendency toward increasing bank fees. For this reason, you should carefully examine the fees your bank is charging for all the services that your business uses.
The most basic service a bank provides is maintaining checking and savings accounts for customers. The sorting and recording of checks takes up a tremendous amount of staff time, but should a bank charge account fees or per-check costs, which in essence mean that you pay for the privilege of letting the bank hold your money? Many times, such charges are negotiable. If your business runs a lot of money through your bank, speak with an officer about having your account charges reduced, or even eliminated altogether. Ideally, you would not pay a monthly charge for your account -nor for purchasing checks or for each check written. If your bank refuses to reduce or eliminate charges, simply consult with an officer at another bank and tell him or her that you'll switch your business if they'll offer reduced fees.

Other charges also can add up. For instance, almost all banks charge for paying a company's overdrafts, or for transferring funds into an overdrawn account from another account. If you frequently overdraw your account, you'll probably have to pay the fees, which can be stiff for each instance (up to $25 and more per overdraft). But if you overdraw your account infrequently (or if you commonly maintain a lot of money in your accounts), speak with an officer to see if you can have overdraft charges removed.

Many banks will notify a company by telephone when they've overdrawn their accounts. However, if you're a steady customer of the bank, and use the service infrequently, ask to have the fee removed.

Many other bank fees are also negotiable. These include, among others, wire transfer fees, account maintenance fees, night deposit bag service fees, account balancing fees, ATM-usage fees, etc. Do not accept that these fees are fixed and unchangeable for your business. Speak with appropriate representatives of the bank and try to have the fees reduced as much as possible to suit your business.

Even if you have a long-standing relationship with your bank -- and know the tellers and officers by name -- you should make sure that you're not being charged more than you should for standard services. And remember, bank fees are liable to change without notice to customers, so prudent small-business owners examine fees regularly.

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