Obligatory Bank Rant

BanksLogosI could probably go on for days on the petty things that drive me nuts about our big banks. I could tell you how long the lines were on Friday, or how unfair it is that they charge me so much in service fees. You’ve heard it all before, so I won’t bore you with those. Instead, I thought I’d rant about something more specific to my job, and maybe something you don’t run into as much from day to day.

As a bookkeeper, I spend a considerable part of my day making sure the business’ money is going where it’s supposed to go. I need to make sure deposits get into the account on time, and that cheques come out when there’s enough money to cover them. Depending on the business, this can be very stressful. With start-ups, this can literally take years off your life.

I can’t count how many times I’ve scrambled into the bank at 3:55pm to make sure the deposit gets into the bank in time for paycheques to clear. Or, how many times I’ve woken up in the middle of the night in a cold sweat, realizing “that cheque” was supposed to clear today, and I’m not sure if there’s enough to cover it.

And this is where the banks fit into my rant.

The problem I have is all about timing. In a successful company, where there’s always money in the bank, this is not a big deal. However, I can almost guarantee that any small business owner reading this has run into the following problem at least once.

The Scenario

You write a cheque to ABC Inc. for $1,000 for materials on the 20th. They run down to their bank and deposit the cheque that same day. Sometime on the 21st, you look at the bank balance online, and see that the bank balance is $1,040. The cheque hasn’t cleared yet, but there’s still enough money in the account when it does.

When you log into the bank account at lunch on the 22nd, you are shocked! There’s a balance of $940 in the account. Upon closer inspection, the $1,000 has been returned to your account, and a $40 NSF fee has been taken out. Apparently, some unexpected bank fees totalling $60 came out of the account, along with the cheque. They were both dated the 21st, but didn’t show up on the account balance until the morning of the 22nd. You now get to make the shameful call to ABC Inc. to explain the situation, and write them a new cheque for $1,030 to cover the original cheque, and their own $30 NSF fee. In all, that $1,000 cheque has now cost you $1,070 and a small handful of greying hair.

As I said, it’s the timing that drives me nuts. In most start-ups, cash is tight, and you always seem to have “just enough” to get by. The bank knows that most owners would gladly run down to the bank that morning and cover the fees. They also know that it’s unfair to back-date transactions like that. If I make a deposit at a teller, it shows up immediately. If I pay for something with a debit card, it shows up immediately. So, if they supposedly clear a cheque on a Tuesday during bank hours, how is it that they can’t show it until Wednesday, but still date it Tuesday? How am I supposed to fix it if I’m not given the opportunity?

I’m sure there are many exceptions. Smaller banks tend to give more personalized service. Even big banks in smaller markets do the same. I’ve always had great service at my Scotia Bank, especially the smaller branches.

Am I alone is this?

Have you had any unique frustrations with the bank, especially regarding your small business. I’d love to hear about them.