Tag: fees

Save Money on Fees

The other questions to ask your financial people and your bankers are what hidden fees are you paying and what hidden costs are you incurring. These show up in the form of minimum account balances, accounts that don’t earn interest and quite often in lower than market interest rates earned.

How much are you spending on bank fees?  It could easily be hundreds to thousands of dollars annually. Even if you think it is zero how much do you think you are paying in hidden fees?

This can be a tough one to answer so you might want to pass this one on to your company bookkeeper or controller.

We all know about the usual highly visible fees such as those associated with minimum deposits, check processing fees, account maintenance fees, returned check fees and on and on. What you may not be aware of, however, is the fact that banks are continuously adding new fees to try to bolster their profits. The easiest approach might be to have someone sit down with representatives from your banks and ask them to explain what fees you have paid in the last 6 to 12 months and how to reduce them.

The other questions to ask your financial people and your bankers are what hidden fees are you paying and what hidden costs are you incurring. These show up in the form of minimum account balances, accounts that don’t earn interest and quite often in lower than market interest rates earned.

Seven Hidden Costs

Are you paying for these seven hidden costs? Do you want to save money? One recent study showed that about 30% of credit card holders pay $100 or more in hidden costs each year and 10% pay more than $500.

If you take the time to look over your personal credit card statements and regular bills it is quite likely that you will find one or more hidden costs. If you challenge your budget managers and accounts payable teams to do the same with your business bills, you will find even more.

Here are 7 common hidden costs and what to do to eliminate them:

  1. Fees for services you no longer need. Replace that rented modem with your own and get a 6-12 month cash payback.
  2. Renewal fees you never wanted. Many trial offers and “free” online deals come with very fine print commitments to renew automatically. If you had to give a credit card number for that “free” offer, assume that there will be a charge next month. Find them on your bills and cancel them.
  3. Hidden fees are common on phone, utility and other bills. Contact the vendor and challenge your bill.
  4. Phony bills are more common in business than in personal life. Cheaters count on our accounts payable personnel paying bills that look legitimate. Directory advertising is a common subject for phony invoices. Make sure everyone reads the fine print and that people who know what they are doing review the bills.
  5. Unwanted subscriptions. Publishers count on your automatic renewal and some send invoices years in advance of expiration. Check the expiration date before paying any invoices. Cancel those you do not want.
  6. Sneaky surcharges. You may have negotiated a fixed price but you must check the invoices to see if the provider has added a surcharge without informing you. Challenge unapproved surcharges and renegotiate or rebid as appropriate.
  7. Unused services. Phone companies and others such as software vendors who charge by the line or seat count on you not checking to see how many you actually need. Do an inventory and eliminate the excess. One client cut over $100,000 per year from their IT budget with this simple action.

Even scrupulous companies count on busy managers to miss these details and pay more. Now that you are alert you can save yourself and your business hundreds to tens of thousands of dollars every year.