Managing Bank Relationships Procedure | TM1050

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easily editable in ms wordManaging Bank Relationships Procedure

Part of financial due diligence in operating a business is having a financial representative (i.e. Owner, CFO, Controller, Business Manager) scheduling regular meetings with your bank representative.  The Managing Bank Relationships Procedure ensures the company is maximizing the benefits of its bank-business relationship. The procedure illustrates how to take advantage of useful banking services and accounts and maximize return on bank-held assets while minimizing the cost of banking. This procedure applies to the Finance Department. (10 pages, 1157 words)

Managing Bank Relationships Responsibilities:

The Chief Financial Officer (CFO) is responsible for managing banking relationships.

Top Management is responsible for overseeing banking relations and approving bank management authorities (e.g., ability to open, close accounts).

Managing Bank Relationships Definition:

Sweep Account – Bank account that, at the close of each business day, automatically transfers funds that exceed or fall short of a specified amount into or from a higher-interest earning account.

Managing Bank Relationships ProcedureManaging Bank Relationships Procedure Activities

  • Bank Relationship Plan
  • Managing Bank Relationships
  • Reviewing Banking Relationships
  • Improving the Management of Bank Relationships

Managing Bank Relationships Procedure Forms


Helpful Hints to Manage Your Banking Relationship


Prior to the meeting, create an agenda and list topic areas to be discussed. These should include things like:

  • Future financial needs for expansions or acquisitions, like lines of credit or loans
  • Best use of cash accounts like sweep accounts to maximize return and minimize expense
  • Use of merchant accounts

Plus, in these times it may not be a bad idea to discuss the bank’s liquidity and financial stability, especially if you have money in non-insured accounts. Be prepared to ask questions that require details, not unresponsive platitudes. Don’t be afraid to ask follow up questions if answers are not satisfactory, after all, your money is in that bank. The bank sure doesn’t hesitate to grill you about your business when the money flows the other way.

Manage Your Banking RelationshipBE PREPARED – ASK THE RIGHT QUESTIONS

Besides creating an agenda, other planning activities prior to the meeting could include reviewing account statements to ensure the information about rates and fees are accurate and up-to-date. Also consider reviewing the bank’s website and promotional materials. Are they offering better rates or services to newly opened account holders? Is that fair to a loyal customer like you?

Another prudent measure would be to talk to your bank’s competitors about their account options and rates. It may not be wise to switch banks every time one offers a slightly higher rate or a slightly lower fee, but due diligence is also exercised by knowing your banking options. If a competitor consistently has advantageous rates and services, and perhaps meets other criteria as well (professional representatives, convenient location, etc;), then you may want to consider starting a relationship with that bank.

Transparency and due diligence is needed all through your business, but especially in the financial operations. An easy first step is transparency and due diligence that help manage your banking relationship.


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