We look at our clients' bank statements all the time and I see so many people not taking advantage of low-hanging fruit from the banks. Here are five easy ways to save time and money!
1) Minimum Balance perks: most banks offer to waive bank fees on personal accounts if you maintain a minimum balance of cash in your account, usually $1000 to $5000. My bank fees would be $29.95/month, plus $120 annual fee on my credit, but these are all waived when I maintain a $5000 balance. I requested my banker to ‘freeze’ $5000, so it is essentially my zero balance and I don’t even think about it. This saves me $480 per year!
2) Automatic Credit Card balance payment: tell the banker you want your credit card balance paid off each month, the day before interest starts accruing. The credit card company gives you a month free to carry a balance, so this will always pay off last month’s balance. Keep in mind, if you consistently use your credit card you will probably not actually get your balance down to zero, you will just pay the month end balance, a month later. Keep enough cash in your chequing account and you will never pay a dollar in interest.
3) Stop writing cheques! There are so many better ways to make payments these days: make payments from your online banking using ‘Make a Payment’, Interac email transfers, pre-authorized debit services, or Paypal. Many countries in the world have completely eliminated cheques; Holland and Germany among them. Cheques cost a lot to order, take time to write, are susceptible to fraud and cost time and money to mail. These other methods of payments are significantly cheaper when you consider the time involved, and each method is actually more secure than writing cheques.
4) Schedule instalment payments: if you are required to make personal tax instalments throughout the year, then schedule these payments from your online banking as soon as you know about them. Many people don’t pay attention to these instalments, but the government does charge interest if your payments are not made. Set these payments and avoid paying interest!
5) Payroll for your business: a payroll run for our 5 employee business takes 5 minutes, twice a month. We use a free online payroll service called Payment Evolution to run the payroll and process the direct deposits. We estimate our annual payroll numbers at the start of the year and adjust anytime there are unexpected changes to payroll throughout the year. Then we break down the annual estimated remittance amount into monthly payments, and set up automatic monthly payments for these payroll remittances (learn more about calculating payroll remittances in our FAQ). These payments are due on the 15th of the following month, so we schedule the payment for the 10th, and we never incur that awful 10% penalty for sending the remittance in a day or an hour late. At the end of the year, we run actual numbers for the year and true up the account balance prior to Jan 15th and then prepare the T4 slips.
Read more about Starting a Business, Small Business Basics and Bookkeeping topics that may be helpful to you and your small business.
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