- Posted by CFO One
- On June 26, 2019
We back ourselves to understand your business and know your industry. And so should your banker or financier. In the past year I have performed three full due diligence reviews on my hospitality clients banking arrangements. This is a great opportunity to streamline your day to day banking operations right through to saving you $’000’s on your interest and transaction banking costs.
It’s as simple as testing the market every couple of years to ensure you are getting the most competitive rates and best service they can offer you. The same as you would test your insurance provider on rates and coverage or employees in a formal performance review.
We have had great success identifying the industry benchmarks around merchant facilities and pricing, bank transaction costs, insurance premium funding and capital asset financing. And the banks are willing to “talk” and “walk the walk” from my recent experiences.
Card payment surcharging had a major shake up in October last year and since then, the industry is still varied in terms of whether to charge or not to charge. Do you even know what you can charge to your customers or what your average cost of acceptance (COA) is? This is one area we’ve been looking at in detail and for one customer who stopped surcharging last year, we have now saved them about $7,000 per annum by aligning their terminal rental fees plus reviewing their card mix and renegotiating the banks margins on the provider’s interchange rates. It’s simply money for jam back into your pocket.
In addition, we’ve been able to polish and promote relationships with your bank, so when you have increased requirements for your business to hold inventory or have an expansion funding requirement, your bank knows who you are, where you’re at and has the financial information and business performance at their fingertips, as provided by us. We make their job easier, so they can focus on the value-add solutions, as they already have comfort on the finer financial metrics and integrity of the financial results, which are timely and up to date month to month.
Let’s get to work on checking your market competitiveness of your arrangements and any pain points you are feeling in your banking relationship.