You have a bank. But do you have a relationship with your bank? A relationship with your bank is important to the success of your business. A banker can be a great source of information and a valuable part of your team. Too often it seems that the banker is only contacted when money is tight or there is an immediate need for cash flow. A business then spends several weeks obtaining information for the banker and attempting to communicate the importance of the current need. If the business had an on-going relationship with the bank, then this process is much easier to handle for the banker and the business.
Four Points to Consider:
- Meet with your banker.
Bankers are happy to meet with customers they do business with. Discuss your business plans and your goals with him or her. The more your banker knows about you and your business, the better equipped they are to provide you with what you need. Bankers get paid based off of the fees that your business generates. They do not charge by the hour as some other professionals do. By meeting with your banker regularly, they may provide you with valuable advice as part of your team in addition to being able to assist with cash needs.
- Take time to understand cash flow.
Your business needs cash to operate. As your business grows, you may experience ups and downs with your cash flow from time to time. If you understand your business’s cash flow needs and can communicate this to your banker, you will be in a better position.
- Be prepared.
Do you know your credit score? Do you know what questions (and your answers) you can expect your banker to ask? You can research these items before you meet with your banker. There are several companies you can contact to obtain your credit score. Also, there is information on what that credit score tells the bank about your business. Don’t be afraid to ask your banker what they analyze when providing them with tax returns and financial statements. If you know what the bank is going to be reviewing when evaluating your business, then you can focus on these areas of the business.
- Maintain good books and records.
Maintaining good books and records assists with the relationship you have with your bank. Do you provide your banker with interim financial information on a timely basis or do they receive a tax return and/or financial statement once a year? The more information you can provide the banker with on a regular basis allows them to make decisions quicker for you.
Too many businesses do not see the value they can have from having a great relationship with their bank and the banker they interface with regularly. Adding another advisor to your team will help with the success of your business. If you have not met with your banker recently, now is as good of a time as ever to begin building a better relationship with them.
Banking Relationship Advice
You’re busy. And you may even feel like there aren’t enough hours in a week to find time to sit down with your banker. But your relationship with them is probably more important to your business than you may realize. If you’re interested in learning more about how to build a great relationship with your banker, contact Rea & Associates. Our team of Ohio accounting professionals stands ready to help you further understand the importance of this critical relationship.