Finding the right bank for your small business can be a challenge. While interest rates are important, they shouldn’t be the deciding factor. This article dives into what truly matters: features, convenience, and how the bank can help your business thrive. We’ll also cover why switching banks might be a better option than you think.

Here are six things to consider when evaluating a banking partner:

Look beyond interest rates – Focus on features and convenience. Then look at fees.

You want to make sure the bank you pick suits your needs as a business owner. In the long run, an extra 0.5% interest won’t actually help your cash flow.

Sometimes, the fees are worth it. At CPN Legal, we opted into extra fees each month to be able to streamline our Health Savings Account deductions for our employees. It was worth the extra $25/mn to automate a manual process.

Ensure the bank integrates with your accounting software & your bookkeeping process.

Make sure you can connect your bank to whatever software you are using, and that the integration updates at least daily, if not on demand. A quick check before you switch goes a long way in saving time and resources. And ensuring you are set up for accurate record-keeping.

Make sure your bank can accommodate granting authorizes users access to your accounts. And make sure you can grant access to features like bill pay, transfers, and downloading statements.

Consider features like online banking, automatic downloads and mobile app functionalities.

It’s worth it to go a step further when asking about features. Here are a few key ones we always like to see:

  • Access to past statements online, without having to send a request.
  • Can statements be downloaded to an Excel file?
  • What about images for deposits? Does it show the entire check, or just a deposit slip? How long will the images be available?
  • Will check images be included on the monthly statement? This is a great feature if you outsource your bookkeeping, as it’s one less piece of information you’ll need to provide.

Check for minimum balance requirements and foreign transaction fees.

This is key, especially for growing firms that keep a tight eye on cash flow. And, if you deal with foreign entities, double checking what fees may be associated with transactions can help you plan ahead.

Look for a bank with a branch nearby or that offers a dedicated banker relationship.

It always helps to have a person to call if you have a question. A personal relationship goes a long way in conducting business.

And of course… FDIC insurance is a must!

Maintaining Trust Compliance: Watchouts when Switching Banks

We all know the importance of maintaining compliance in your every day trust transactions – but what do you need to be on the lookout for when switching banks? There needs to be a clear trail to follow as funds move to the new bank. The bookkeeping throughout this process must be precise, and one small misstep could mean funds are mishandled and trigger an audit.

Here’s a checklist to follow but know you don’t have to go it alone. Reach out to your CPN Legal team before you switch, and we’ll help you with every step.

Prepare for the switch

Make sure your trust accounting is detailed & accurate before switching banks. This includes items that may not have posted to the bank such as deposits or payments.

Select a cutoff date

Pick a date that gives you at least a week to test out the account before your next billing cycle. You don’t want to use your monthly bills as a test run.

Switch any payment links on your website or invoices to the new account

After the cutoff date, make sure your new account is the account being used.

Detail the account before & after the switch

Make sure you have a detailed listing of individual trust balances before and after the switch, and make sure they match.

Close the account… after you reconcile

Make sure to wait until all prior transactions have cleared & the account is reconciled before closing. The bank and book balance should be zero.

Any outstanding transactions must be given time to exceed their expirations date, such as undeposited checks. If funds remain unclaimed, be sure to work with your State Bar for specific rules to handle them.

Update your software and bookkeeping!

Make sure your bookkeeper & all software is update to date with the new account. This includes QuickBooks Online & Clio, along with your bookkeeping team.

Migrating trust accounts to a new bank involves a bit of planning and preparation, along with a hands on team. Throughout the process, you’ll want to leave a clear audit trail. The extra work put in before and during the switch will payoff in the long run.

CPN Legal Can Help

Find yourself wondering if your bank is the right fit for your business? While switching banks sounds like a daunting task, having the right partner and knowing you’re making the right choice can put you at peace. Finding the right bank can make a significant difference in your business. Not for managing your money, but ensuring you have the right partner that fits your processes and growth.

Need suggestions on what banks the CPN Legal team likes? Reach out to your dedicated team or contact us here.