Steps to Conduct an Account Analysis:
1. Gather Account Analysis Statements
- Request or download detailed account analysis statements from your bank.
- Set up automated delivery if available.
- Review statements on a regular cadence, usually monthly.
2. Identify and Categorize Fees
- Compare fees against contractual agreements to ensure accuracy.
- Examine overall price and volume as well as individual fee price and volume month over month to identify anomalies.
- Ensure accounts have appropriate services implemented on them to prevent fraud, waste or abuse.
3. Evaluate Earnings Credit Rate (ECR)
- Determine if your ECR offsets fees based on your account balances,
- Negotiate your Earnings Credit rate as needed.
- Assess whether you are maximizing the value of your cash balances.
FREE RESOURCE: How to Negotiate Your Earnings Credit Rate
4. Compare with Industry Benchmarks
- Research standard banking fees and ECR rates in the market.
- Compare with your peers.
- Negotiate better terms with your bank if rates are unfavorable.
5. Make Data-Driven Adjustments
- Identify duplicative, inefficient, or unnecessary services.
- Consider consolidating accounts or adjusting cash management strategies for efficiency.
FREE RESOURCE: A Treasurer’s Guide to Understanding the Account Analysis Statement
What’s important here?
Account analysis helps organizations monitor and optimize their banking costs and cash management by reviewing fees, earnings credit rates, and cash balances. Regular analysis can uncover cost-saving opportunities, such as reducing unnecessary fees or renegotiating banking terms.
Organizations can improve financial efficiency and cash flow management by comparing rates and ensuring that account structures align with operational needs. Conducting account analysis on a routine basis leads to better financial decision-making and ensures that organizations are making the most of their banking relationships.
