Disbursement Control of Trade Market

Sometimes it makes sense for small, fast growing companies to mimic the financial practices of large corporations-and sometimes it does not.

Take controlled-disbursement accounts accounts, which large companies have been using for about a decade. "The concept is simple"' says Jim Sagner, a partner in Orange, N.J. "Banks that offer these accounts can tell corporate clients by 10 or 10:30 a.m exactly how much they will need to cover all the checks that day. Since other banks clear deposit s all day long, their corporate customers need to keep more on daily deposit in order to avoid bouncing checks."

Sounds great, right? To make these accounts even more enticing, big banks, which are battling enormous overcapacity in the marketplace, actively seek small companies as clients. But according to Sagner, controlled-disbursement account are often too pricey to make sense for most small companies. There's usually a $50 to $100 fee for account maintenance, as well as extra fees, like $20 to $ 30 for each presented check, electronic-funds-transfer charges as money moves between accounts, and so on, "he says.

A better plan for small companies, Sagner suggests, might be to "keep your costs down by arrangement between a money-market account and a checking account that are both types of services before making a decision. Many small banks are starting to tap into the small business environment, and they may offer surprisingly good deals on controlled-disbursement accounts.