An important part of your review of your banking services is studying how you actually undertake and manage your transactions.

It is not unusual, especially with smaller organisations to rely on a cheque book for paying accounts.  Often the main reason for this is that the organisation requires two signatories for each cheque and as a result this adds an extra level of security and accountability.

While this may be the case, it is still very costly, plus other methods of making payment are just as safe, secure and cost significantly less.

Your organisation should examine the use of these other methods for making payments.  These include:

  • BPay.  Most large and government organisations can receive payments via this method.
  • Direct debit.  This can be a good way to make regular payments such as, for example, telephone, rates, instalment or regular lease payments.
  • Online or internet banking.  Most accounting software link to your bank account allows you to make payments online.  This can be a one off payment or done in batches on a regular basis.
  • Telephone banking.  Transactions can be processed by calling up the bank to arrange payments.  Possible uses for this could be when there is an urgent need to make a payment, when the office is closed or the computer system is down.
  • Credit Cards.  These can be used for one off payments that usually relate to minor day to day payments such as for petrol, accommodation or travel expenses.

An important feature to note with these payment methods is that you can set a range of controls such as daily, weekly or batch limits that can also be linked to authorised staff.  For example, you may have a daily limit of $10,000 for the accountant but with if the authorisation of the treasurer this may be increased to $20,000.

The purpose of these levels of authority is that they are linked to delegation limits, risk and governance policies.  Exception reports can be provided to the committee of management so they are also made aware of transaction above certain amounts.

The next post regarding banking services will examine ways you can reduce costs for receiving income.