12 Tips for Optimising the Use of Your Current Account - 3
Get Best Value and Avoid Paying Through Your Nose.

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• Use your cheque with a sense of reponsibility. You need to build a reputation - it pays in the long-run - with your bank and parties you issue cheques to. This imposes a responsibility to issue cheques with care, ensuring that your is funded or has a line of credit. Trust that this ultimately translates to monetary value, beyond the moral issues. How? With your bank, you keep a good track record which is helpful in matters like credit and the price you pay. Never compromise your credit rating. With you suppliers and others you give cheques to, you gain the priviledge of more cheque payments, which saves a lot of inconvenience. You most know too that paying by cheque allows you more flexibility in funding and managing your account. Most times that you a cheque, it takes a little while to hit your account. That is like defering payment, which can help your fund management effort.
• You may need a line of credit. Bank credit costs money in interest and other charges and requires conditions to secure. If your use of the account doesn't justify the trouble, you shouldn't bother. But bank credit can be helpful in many ways, especially for an active business account: you are able to boost your activities by drawing on more resources. The good thing about a line of credit is that it is a stand-by facility. You don't pay interest except on what you draw. And since the need for additional funding can just suddenly arise, a line could support the management of your account - you operate with your resources as much as possible but fall back on the line each time you have to. That way, the interest charged will also be minimal. If your activities justify a line and you have the credit rating to secure one, it could be a good benefit for the current account relationship with your bank.
  
  Other forms of credit that may better suit your specific business or other requirement are also possible. For very temporary accomodations, for instance, the fast-track product called TOD (temporary overdraft), is popular in our market. LPO (local purchase order) financing is also in strong use in supply-contract funding, especially in servicing the oil and gas sector. The point being made here is that these services and products could add value to your use of a current account, when appropriate. If you need and merit any such support from your bank, that's part of the reason and benefit of that relationship, so don't fail to request it. You will help your position by continually learning about these products (by asking questions, reading available brochures and visiting websites), so that when you have a need, you know what solution to seek and where.
• Credit Interest Could be RuinousThat's right, and that's how all good things are. Using borrowed money can be very helpful in accelerating the growth of your business, but that, too, demands a lot of discipline on your part. The reason is that, if mismanaged, credit costs can drag you or your business into a crises. Don't seek to abuse a facility you have taken and don't even consider taking one, except you have a clear idea of what you are deploying it into and reasionably expect returns that more than cover the cost. That purpose must also readily generate the cashflow to service and liquidate the account as and when due. Interest on borrowing gets compounded and that could mean exponential growth of the account if you fall into arrears. That could easily explode and crystallise into a debt burden that can choke your business. So, be very calculating and targeted when it come to bank borrowing. You can use it, get the results you want and exit or try to abuse it, stay stuck and possibly drown your business in bloated debt.
• Use other technology tools. Technology keeps evolving ways to increase efficiency and cut costs and, in the Nigerian environment, banks have been quite in the forefront of adoption of relevant technologies. Don't shy away from those that have practical value. The ATM, for instance. You shave off a lot of time wasted in banking halls and this you can put to other use. Funds transfer too, which saves the trouble of carting cash about. Transaction alerts, whether by email or phone SMS, which can quickly draw your attention to an unauthorised or improper transaction passing into your account. Bills settlement, especially by electronic or other automated means, when a fixed amount is involved, as in certain subscriptions. Whatever you can use available technology to safely do and save some time, do not hesitate because all that time adds up to a lot, especially in high-traffic locations like Lagos. There is always so much you can do to earn more money. Spending all your time on routine activities that can be put on auto-pilot without any significant risk, is certainly not one of them. As you will also find out, most of those services are mere icings that banks don't charge for or at the worst, take token fees for.
• Be familiar with the market. You need an enduring relationship with your primary banker alright, but don't stay glued to a bank without knowing what happens elsewhere. That could cost you money and opportunities in a competition-driven market where operators are introducing sweeteners all the time. Junketing between banks may be couter-productive, just as not reaching out. While maintaining a primary relationship with one bank, try some bit of presence in one or two other places. For one, you get a chance to size them up and compare offerings and, if nothing else, it helps you in managing your primary bankers better. Also stay informed of what happens in the market generally. That helps you ensure you get the deal you deserve by market standards, otherwise there will be justification for jumping ship. It's important too, to know if and when there are developments in the market or concerning your banker, that might adversely affect your interest. You don't have to wait till it's too late. Getting broad-based market information will be helped by reading from the media, interacting with various banks and generally keeping track of developments in the environment.

Seek to Optimise Value
Your current account should open you up to various opportunities to use banking support to advance your business and even personal interests. That's what a banking relationship, especially for a current account, should be. It is intended to drive operation in what you do and many bank products are developed to foster that objective. It is your business to find out those that will be of benefit and how best to tap into them. The service charges that can arise in this process should also be managed with tact. If you take time to fine-tune you account management process, you can optimise the benefit of keeping that relationship.

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