Top 10 Bank Services for Corporations

As part of my ten years in banking, I've spent the last three in the treasury office of a Fortune 500 company, leading to a thorough knowledge of banks and their services. This is a basic guide to the top ten bank services that are useful to large corporations.

Account Analysis. All of the services listed here incur fees, but not to worry! Account analysis is a process in which the bank compiles all your fees into one group at the end of the month. They then apply a credit for the balances you maintain with them, thereby waiving some or all of the fees.

ACH services. Automated Clearing House is another way to send funds electronically. It takes longer than a wire transfer - two to three days - but it is also cheaper and transactions can be sent in batches. The most well known use of ACH is "direct deposit" of payroll. In addition to initiating ACH transactions, another bank service is preventing ACH debits from clearing your account, an important fraud control measure.

CDA - Controlled Disbursement Account. In a normal checking account, checks can clear at any time, so it is necessary to keep sufficient funds in the account to cover all outstanding checks. This can tie up hundreds of thousands of dollars or more. But with a CDA, the bank gives you one total late in the morning of all the checks that will clear that day and you can fund the account for exactly that much. This allows you to keep all your excess funds invested.

Image Services. This bank service allows you to receive images of paid checks, deposits, returned items and statements both online for recent transactions and on CD-Rom for archiving.

Lockbox. Lockbox is a deposit service in which clients send payments directly to the bank, which in turn places the funds in your account and provides data and images to you for recordkeeping purposes. This allows quicker access to your funds as well as audit control.

Online Cash Management. Most sizeable banks will offer some type of online service that allows you to get your account history and recent images, place stop payments, initiate wire transfers, and a host of other services. This is quicker and more convenient than calling or visiting the bank and usually cheaper per transaction as well.

Positive Pay. Also known as Match Pay. With this bank service, at the end of the day you transmit a list of all the checks you cut that day to the bank, and, as checks clear, the bank consults the list. If a check is presented for payment that is not on your list, the bank contacts you for approval before paying the item. This is a fraud control measure.

Remote Deposit Services. RDS allows you to scan a check that you wish to deposit and send it to the bank electronically. Aside from being convenient, most banks offer lower deposit fees and later cutoff times for clients using this service.

Wire Transfers. A wire transfer is a method of sending funds anywhere in the world electronically. In the U.S. this is done via the Federal Reserve, internationally via SWIFT or CHIPS. Wire transfers initiated in the morning will usually be credited to the recipient on the same day.

ZBA - Zero Balance Account. A master account is linked to multiple sub-accounts. Any funds deposited to the sub-accounts are moved to the master account at the end of the business day. Conversely, money is moved from the master to the subs to cover any checks that clear that day. This allows you to keep the bulk of your cash in one place (and invest it!) while still maintaining separate checking accounts for recordkeeping purposes.

I have found these bank services to be indispensable for the efficient handling of a corporate bank account. I hope they are helpful for you, too!