Michael Dollard (pictured) is a vocal advocate of online banking. “We’re doing on average 50-100 transactions a day using online banking; we try to use it as much as we can,” he says.
The director of midlands-based PPS Property Management goes so far as to say he wouldn’t like to face the day without it. The reasons for going cyber are multifarious but the bottom line is that it saves money while offering convenience.
Despite this, online banking for business has not taken off to the same extent as it has for personal customers. For many personal users, especially in the under-35 segment, it has become as essential as the mobile phone and email.
Dermot Nolan, head of business marketing with Bank of Ireland, believes this is about to change. The tipping point has arrived for online business banking and broadband is the catalyst that is making it happen. “Broadband is encouraging businesses to get online. It’s had its problems over the past few years but it’s now getting to the stage where people can use it,” he continues.
“With personal banking you could do it over a dial-up connection; it only takes a few minutes. For businesses, because there’s so much money involved they would probably need to be on it for an hour a day to do payroll and payments. They need secure, fast connections.”
While the rollout of broadband infrastructure makes online banking for business feasible, it’s the benefits that will sell it. Those of us who do our personal banking online will attest to the convenience of internet banking, but Nolan is quick to point out that there are hard cash savings to be made.
“It is not just a matter of convenience. We have worked out that writing a cheque costs about €1.20; that’s based on administration and postage. Making a payment with online banking costs 44c; that’s 76c cheaper. On average, our customers would write 50 cheques a quarter so there’s savings to be made instantly.”
With online banking it’s possible to transfer money seamlessly between accounts and make payments at the touch of a button. Staff and suppliers can be paid automatically and these transactions can be set to repeat again and again, meaning they don’t need to be initiated each time.
It’s also possible to streamline payroll and accountancy services, a point taken up by Sean Jevens, head of e-channel development with AIB. “Accounting systems can generate payroll files. Once you upload that file to iBusiness Banking [AIB’s online business service] we’ll action that file,” he says.
“Up to 50 accounts can be paid through our staff payroll module,” explains Lisa Lintern, head of communications with Ulster Bank Group. “You can also amend and delete all your beneficiary details online. Future-dated payments can also be keyed up to 90 days in advance.”
Features like these attest to the appeal of online banking. For Jevens, the beauty of it is, put simply, that it allows businesspeople more and better-quality information instantly. “You can go online and search through your transaction history, take a segment and download it to an Excel spreadsheet.” This integration with other systems is valuable from a reporting point of view, he notes.
“You can download your transactions for easier management of finances,” confirms Lintern.
From a business control perspective, online banking gives the boss a comprehensive top-down view of the business accounts whenever he or she wants. It’s also possible to set up profiles for subsidiary companies that can then be incorporated into an overall view of the company, making it easier to take stock and plan ahead. “You can check the interest that’s applied, the interest that’s accrued, the fees and so on,” offers Jevens by way of example.
Bosses need not worry about their funds being sent into cyberspace by a careless touch of a button either: different levels of staff can be set up with different levels of access to the service. “The boss would have overall access and control; a junior employee might just be able to view the balance; a senior executive might be able to move money internally; a financial controller might be able to transfer to other accounts,” Nolan illustrates.
While using online banking might seem a no-brainer, take-up hasn’t been as meteoric as one might expect. “If you look at the stats we’re behind the EU average,” says Jevens. Take-up of online banking for AIB is cruising with a growth rate of around 20pc, the same for both personal and business customers.
Nolan makes the point that 50pc of all business have no hard cash requirements and these are the ones most likely to move over to online banking quicker. The other 50pc, for example hotels, shops and travel agents, will move over to the online banking fort some of their requirements but staff will still need to walk into a bank and lodge money.
The cost of online banking is fairly nominal for the convenience it allows. In most cases multiple bank accounts can be added, up to a limit, for the base price. It is also possible in most instances to pay extra for an upgraded service, for example to provide treasury features or to add more subsidiaries.
Online banking resources for business
www.aib.ie
Click on Business Internet Banking on AIB’s homepage to have a look at its iBusiness Banking offering. Its annual base cost is €200
www.boi-bol.com
Bank of Ireland’s Business On Line service explained. The base price of this service is €15 a month; 365 Business, which is aimed at sole traders and micro businesses, is free
www.ulsterbank.ie
Browse Ulster Bank’s website for details about its Anytime Internet Banking for Business package. This service costs €19.05 per month for the pull payment and accounting servicing modules; it’s free for those who opt for just the account servicing module
www.nationalirishbank.ie/link/BusinessOnlineServices
Information about National Irish Bank’s online banking for business service, Business eBanking, can be found here. Also includes Markets Online, the trading component of Business eBanking. The service is modular in design. Basic package costs €100 plus Vat to set up and full package costs €150 plus Vat. Monthly fees are charged thereafter depending on how many modules are signed up for
www.angloirishbank.ie/online/business-customers.asp
AngloConnect, Anglo Irish Bank’s online banking service, allows personal and corporate customers access their accounts, download account details into spreadsheet format, check balances and print out statements and interest certificates. It is free to use
www.finfacts.com/IFD/banks.htm
Business and finance portal with information about business banking and links to all Irish banks and financial institutions.
Paying its way
Michael Dollard wouldn’t like to face the day if he didn’t have online banking. Dollard is a director of PPS Property Management, which trades as Midland Letting and Property Management from a premises in Tullamore, Co Offaly.
The company has about 185 landlords it makes payments to on a monthly basis. Going back a few years, this would have meant walking into a bank branch and lodging the money to individual accounts, a process that doesn’t bear thinking about, says Dollard. With online banking, these payments are done automatically and instantly.
The company also accepts rent payments from tenants through online banking, from which it deducts its fee. “We operate four accounts of our own through Bank of Ireland’s Business On Line,” says Dollard. These include a client account, a Vat account and a PAYE/PRSI account.
“We can bounce money from one account to another and it makes it very easy for us to do it. All of our beneficiaries, our landlords and everyone on the payroll is on Business On Line; a lot of our debtors are set up on it as well.”
Apart from ease of payment and payroll management, online banking gives Dollard an instant view of the state of the company’s finances and helps with cash flow.
“In a business like this where you’re dealing with a huge amount of tenants and you have to monitor rent on a daily basis, it’s invaluable the access that we get even just watching our accounts to see what rents are coming in and when they’re being paid,” he explains.
“If a rent isn’t in the account first thing in the morning that it’s due, we can action that problem immediately. We don’t give any of our tenants a chance to have us in arrears.
“We can even monitor our own accounts five or six times a day to keep an eye on them. We trade a Vat account and a PAYE/PRSI account, so all funds are lodged there on a monthly basis.
“We never let them build up on our regular company account so we’re not being hit with a big Vat or PAYE bill after three months of trading. It lets us keep on top of our cash flow.”
Another feature Dollard will be using soon is the capacity to export data from Banking On Line to Excel spreadsheets. “We don’t do it yet but we plan to. We’re doing on average 50-100 transactions a day using online banking. We try to use it as much as we can.”
By Niall Byrne