Tips for working with your bank
A good working relationship with your Bank Manager is a key element of business survival during the current economic downturn. Central to good cashflow management is your bank balance, your current bank faciliities and your bank manager.
Keep the communications lines open so that the bank is aware of your trading conditions and can respond quickly to your needs.
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Provide the bank with all necessary documentation, so that they can form a positive view of you and your business, and can make a good case to their Head Office on your behalf.
Your Management Plan should give the Bank Manager confidence that your loans and overdraft facilities will be carefully managed.
See Preparing to meet your Bank Manager Checklist for a handy list of documents and other information to bring with you when you meet with your Bank Manager.
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Illustrate how the current downturn has impacted on your activities and how you are preparing for economic recovery, based on logical and informed analysis of your financials and other key indicators.
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You should show that you are in control of all the essentials - managing payrolls, watching gross margins, paying bills and taxes as they become due.
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Bring your senior team - including your accountant who can explain the figures.
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Provide your bank with financial updates, at least quarterly.
Remember!
Your bank's continued support for you will rest mainly on the bank being assured that:
- your business is being soundly managed.
- you are being proactive in addressing the impact of the downturn and in planning for the economic uplift.
- you are making full use of your own financial information - Budgets, Management Accounts and Cashflow Forecasts.
- you have a plan in place to manage your debts and meet your loan repayment obligations and interest payments as they become due.
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