Establishing effective business processes and controls over access to your bank accounts will help to ensure the smooth flow of financial activity, improve security, and generally improve your relationship with your banking service providers.

 

What is access?

The term ‘access’ needs some explanation. With the shift to internet-based banking activity, access to your company’s banking functions happens at two different levels. Firstly, access to the company’s banking accounts via the internet, by signing-on through some digital portal with current credentials. Secondly, the more formal dealing with the bank to open, close, manage or modify your company’s bank accounts. This requires action by people who are registered with the bank as personally capable of issuing instructions. Generally  they are known as “authorized signatories”.

 

Bank Account Management

The overall process described here is Bank Account Management (BAM), dealing with the policies, procedures and actions you should follow. BAM will help you meet the challenges and risks associated with banking, and to establish effective business processes and controls around your bank account information.
One of the most important features of BAM is the management of who should have access to your company’s bank accounts, since the security of your whole financial structure is built on establishing authority and trust.

Permission for company employees and external service providers to access bank accounts should be granted at appropriate levels, which is determined by the function that they should be performing and the specific purpose of the account.

 

Internet access

The first type of access should be controlled by management, who set up the credentials for online access. This can be done on a personal basis, where individual people are allocated login credentials, or on a functional basis, where generic credentials are set up and then allocated to the people who will be authorized to perform some banking function. For example, you can either register the manager of the purchasing department by name, and give her access to the purchasing accounts, or you can set up a generic account (like ‘purchasingmgr’) and then the manager logs on with these credentials.

 

Authorized officers of the company

For the other type of access, at the highest level is an ‘authorized signatory’, which is a person who’s been given the right to sign documents, checks, and instructions on behalf of the company. The process of signature authorization determines the general responsibilities for authorized signers to follow when reviewing, approving and processing company dealing with the bank.

 

Best account structure to manage access

Properly organized banking arrangements should start with setting up separate bank accounts, each of which must serve a different purpose. Keeping separate bank accounts offers greater flexibility and control, making it easier to achieve your financial goals. A typical recommended spread of different bank accounts would be a business checking account, department-specific accounts such as purchases, human resources, payroll, office management etc. Other special accounts may be related to savings, money market and merchant account and any others appropriate to your business. Access to these accounts should be allocated on a strictly functional basis, so that there can be less interference between the actions taken.

 

How to remove a signer from a corporate bank account.

Signatory authority is allocated on a person-by-person-by-account basis. Removing a signer from a corporate bank accounts requires instructions to the bank to perform this function, by a person who is themselves a signatory authority with the necessary level of power.

Removing access for internet accounts involves revoking the sign-on credentials for the person. As part of the BAM function, all sign-on credentials should be stored in a central database, so that access can be removed instantaneously.

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