When you’re a CFO or the head of accounting, you keep a close eye on your business’s cash flow. Sales are great, but cash flow is essential to keep the daily functions of the business running smoothly. Cash flow covers your daily operating expenses, including payroll, utilities, supplies, and rent or mortgage payments.
Even as you carefully watch your cash flow, bank fees might be disrupting it. You might think that these fees are the cost of doing business. But you need to watch them carefully and determine if there are ways to save money and keep your cash flow in tip-top shape.
A bank fee audit can help you get these nuisances under control. Here’s a look at some of the most common bank fees that might be wreaking havoc on your cash flow:
When you’re looking over your bank statement, you might see a line item that says “bank fee” and a dollar amount. In some cases, this line item incorporates a variety of fees, and not all of them apply to your business or account.
The banks are masters at incorporating multiple fees into a single line item, hoping that customers won’t ask too many questions. When you question the bank about the fees, you may find that part of this fee doesn’t apply to the services you used or the account type that your business utilizes.
Cash Deposit Fee
It’s a bank! They take cash and give cash out, but your bank might charge you a fee for depositing it. Some banks allow their business customers to deposit cash up to a predetermined amount without a fee. Any cash after that amount is charged a cash deposit fee.
If your business deals with a lot of cash sales, these fees can really hamper your cash flow. Typically, you pay a fee on each $100 over the predetermined limit. You may want to check your statements for this type of bank fee.
Transaction Limit Fees
From depositing checks to writing them, your business probably has more than a few transactions each month. This can include things such as making a deposit, paying a bill, or employees and management using a company debit card from the account.
Some banks limit the number of transactions that you can complete for free each month. After you exceed the number of transactions, you start accumulating fees for the additional transactions.
It’s a good idea to know how many transactions your account allows and the accompanying bank fee amounts when you exceed that number. Knowing these thresholds can help you catch problems before they consume your cash flow.
Insufficient Funds Fee
Also known as an overdraft fee, this bank fee is charged when the bank processes a transaction you made when you didn’t have the funds in your account to cover it. These fees are usually substantial. They can run between $20 and $60, depending on your financial institution.
These charges can add up quickly. Sometimes, your overdraft is a simple miscommunication between people inside your company or a delayed deposit into your account. Most banks will waive these bank fees as a courtesy once a year or a quarter. But you won’t get them to waive most of them.
Credit Card Processing Fees
If you’re running the credit card payments that you take from customers through your business bank account, you’re getting charged a fee for this. Most banks take somewhere between two and six percent of the total credit card transaction for processing it.
This can add up fast. You might notice this fee on your bank statement as multiple line items. Unfortunately, almost every company that processes credit card payments charges a processing fee, but the amount varies. You might be paying more than you need to for the convenience of using the same account.
Credit card processing companies like Bambora and Vantiv often have fees associated for each credit card transaction, meaning every charge will create an additional line item for the fee. Depending on your bank, that counts as transactions eating up your monthly limit.
Monthly Service Fees
Unlike your personal checking account, it’s harder to find a bank that offers business checking without an accompanying monthly service fee. This is a fee for having a business account with the bank.
You generally pay between $8 to $30 each month for the account. You might be able to find a business checking account that waives this fee if you use your accompanying debit card or meet some other conditions.
However, a monthly service fee can eat into your cash flow. It may leave you scrambling to make up the difference in sales or deposits.
Banks love their fees, and they make a lot of money from them. However, a bank fee audit can identify how much of your cash flow is consumed by these fees. At Util Auditors, LLC, we can conduct an audit on your accounts to help you save money on bank fees and improve your cash flow.