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How to take advantage of your banking partner

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Is your bank helping you make money?

Optimism is on the rise among business owners. This is the first year coming out of a down cycle in the economy and businesses are ready to grow. They are looking to expand operations, hire new talent and purchase new equipment. But they are also searching for new strategies, financing options and ideas for better market penetration. In today’s economy, one of the best partners a business can have is their banker. Ask yourself if your banker is:

  • bringing more to the table than monthly reports or the weekly “how’s it going” call
  • strategizing with business owners on how to expand operations, create more efficiencies and generate more revenue
  • understanding every aspect of a business, from cash flow to risk management and payroll to IT services.

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Here are a few areas bankers can help businesses strategically grow and profit in today’s economy.

How Does Your Cash Flow?

Most business owners talk about the importance of cash flow, but not many go deep into the process and determine how to make it better. Businesses need to ask questions such as: How many days does it take to collect on receivables? How long are you paying on collectables? Are you getting discounts for paying early?

A lot of companies are operating inefficiently.  They are duplicating internal steps or making extra steps to receive money. It costs $2 to $5 to mail a check, whereas sending an Automated Clearing House (ACH) payment costs less than $1. Businesses need to review how much time it takes to print, stuff and mail a check versus using a card or ACH payment.

By working closely with a banker, businesses can gain cash flow relief and create better efficiencies in their operations. Bankers also can help business owners create a profitable and logical cash flow system.

Risk Management and Efficiency

Risk management is exactly what it sounds like. Anything businesses can do to manage risk will ultimately benefit their bottom line. This includes having dual controls with employees, doing regular inventory checks, having different people sign off on checks and having a process to detect and deter internal and external fraud. So much risk can be diverted simply by paying attention to the small, everyday details.

Risk efficiency is something bankers also should discuss with businesses as it relates to items such as outsourcing payroll or return collections. Often times there are functions that businesses can outsource to save time and money. One of the main things to be outsourced is payroll. A payroll provider can help save a company time and money. They may also accept tax liability so the employer isn’t responsible for tax penalties.

For companies with large receivables, it may be more efficient to have a lockbox or outsourced collection system. Bankers can greatly reduce time and efforts for clients that have high receivables. Another area to outsource is IT. Businesses can outsource their IT needs to a third-party group in order to save time, headaches and money.

Creating Operational Efficiencies

Bankers understand cash and business cycles. They can help a business create operational efficiencies in several areas, including payments, cash flow cycles, commercial cards, reconciliation and so on.

One example is the process of purchasing equipment. As businesses expand their work, make repairs or replace units, they may find themselves making multiple purchases throughout the year. Rather than go through the process of taking out a separate loan for each investment, companies should map out their anticipated needs for the year and take out a line that will cover all potential investments. Not only will this save time, but it also provides flexibility to buy new or used equipment and to proactively plan for capital expenditures they may want to make during the year.

Purchasing cards are another item to consider from a processing standpoint. Not only does the right program provide valuable rewards, but it also cuts down on check writing and provides increased flexibility in cash flow. Additionally, it creates a more streamlined tracking system for accounting departments. By allowing job numbers to be attached to specific expenses, companies can easily allocate costs to the appropriate projects, which results in more effective planning and budgeting.

By working closely with a banker, businesses truly have the opportunity to expand and grow through creating efficiencies in areas they never knew could be improved. Any operational, cash or risk management improvement will ultimately improve a company’s bottom line and their outlook for future growth opportunities.


Mr. Bibens is a treasury management officer for UMB’s Commercial Deposits department. He is responsible for providing consultative technology and cash flow management solutions to companies and public entities throughout the Greater Missouri area. He joined UMB in 2010 and has 10 years of experience in the financial services industry.



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Financial Word of the Week: FDIC

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FWOTW

You’ve seen “FDIC” logos at your bank (we hope!) and heard commercials that end with the quick disclosure “member FDIC.” But what does that mean for you? The Federal Deposit Insurance Corporation (FDIC) insures the money in your checking and savings accounts up to $250,000. If you use more than one bank, you’re also guaranteed up to $250,000 at each insured institution. That’s why financial experts advise spreading out your wealth after you reach that maximum.

The FDIC is a government agency (created in 1933 after thousands of bank failures) that manages bank insurance funds. FDIC insurance is mandatory for all U.S. chartered banks and banks that are Federal Reserve System members.

 

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When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



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Website maintenance this weekend

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Our umb.com website will be undergoing maintenance Saturday night. It will be unavailable starting at 11:00 p.m. (CST) Saturday, November 22 and accessible again by 5:00 a.m. Sunday morning. Text and mobile banking will still be available at this time.

Construction Cones

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UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



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Pairing your passion with your giving

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Did you know you can use a wealth advisor for more than simply financial and estate planning? Whether it’s your business or your family’s philanthropy, a wealth advisor can match you with the organizations you want to work with and even set up meetings with the board of directors for you if desired.

The “why” behind giving is the most vital. When we match an organization’s mission with a person’s passion, there’s power in that.

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Ms. Barnas joined UMB in 2007. As Senior Vice President Regional Manager, she is responsible for the growth and support of new customer relationships as well as supervision of regional sales associates. She is also responsible for oversight and delivery of the financial planning discipline within the region. Ms. Barnas has 28 years of experience in the financial industry. Prior to joining UMB, she served in retail and collections management at Bank of America and Banc of America Investment Services, Inc. and premier client manager within the Global Wealth and Investment Management division. Ms. Barnas studied business and communications at Missouri State University in Springfield, Mo. She serves on the Child Advocacy Center Board and the Director’s Council for the Foundation for Springfield Public Schools, and she was the Charter President of the Summit Optimist Club in Springfield, Missouri.



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More holiday sales = economic growth

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Black Friday is only 10 days away! Will you brave the mall? As you stand in the long lines, we’ll give you some tidbits to think about with how your purchases play a part in boosting the economy this holiday season.

See below for more…

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This year retailers are expecting much more than a lump of coal. Major retailers and shipping companies are expecting holiday sales to increase more than 4 percent. We haven’t seen 4 percent growth since 2011. Throughout the last decade, holiday sales have averaged 2.9 percent growth.

Many retailers have already announced significant hiring plans to meet the demand—so seasonal workers may be up as much as 10 percent from last year. A couple of primary shipping companies are even doubling their holiday workforce largely due to demand coming from e-commerce.
1So while you can see that most of the economic data in the United States supports a rather jolly shopping season, we can’t ignore some risks that could shake consumer confidence. A correction in the stock market, or signs of a recession in Europe are events that would in – fact, affect this forecast.

However, we strongly believe that consumers are in better financial health for a number of reasons:

  • Household net worth is at an all time high. This is due to higher stock and home prices.
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  • The labor market is solid. Unemployment is less than 6 percent and job growth has been increasing at a nice pace. These employment gains should continue as there are 4.8 million job openings, a level we haven’t seen since 2001.
  • You are probably noticing lower prices at the pump as well. That translates to more disposable income in consumer’s pockets.
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  • And finally, consumer confidence has been trending up since the Great Recession. And when we feel good about things, we consume.

There are even more factors that point to a better holiday season than last year:

  • Last year the government shutdown in the fourth quarter may have shaken consumer confidence and affected spending – we aren’t facing that situation this year.
  • Unseasonably cold and stormy weather led to some store closings across the nation.
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  • Lastly, in 2013 there were six fewer shopping days between Thanksgiving and Christmas compared to 2012. This year there is one additional day, which makes year over year comparable sale easier to beat.

We think this holiday shopping season will support our forecast of 3 percent economic growth in the fourth quarter.  We also expect to see positive returns in the domestic stock markets.

I wish all of you a happy and healthy holiday season. I’ll be back to deliver part two of this forecast after Thanksgiving.

 

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


K.C. Mathews joined UMB in 2002. As executive vice president and chief investment officer, Mr. Mathews is responsible for the development, execution and oversight of UMB’s investment strategy. He is chairman of the Trust Investment, Asset Allocation and Trust Policy Committees. Mr. Mathews has more than 20 years of diverse experience in the investment industry. Prior to joining UMB, he served as vice president and manager of the portfolio management group at Bank of Oklahoma for nine years. Mr. Mathews earned a bachelor’s degree from the University of Minnesota and a master’s degree in business administration from the University of Notre Dame. Mr. Mathews attended the ABA National Trust School at Northwestern University and is a Chartered Financial Analyst and member of the CFA Institute. He is past president of the Kansas City CFA Society and a past president of the Oklahoma Society of Financial Analysts.



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Financial Word of the Week: Laddering

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FWOTW

Last week, we explained how Certificates of Deposit (CDs) can be a wise option due to their higher interest rates compared to other types of bank accounts. One way to avoid early withdrawal penalties if emergencies arise is to “ladder” your CDs.

Laddering CDs involves investing your money at different maturity terms so they become available at different periods. To create a CD ladder you should research various financial institutions for the best rate. Once you identify where to invest your money, decide how much you want to invest over each term—divided evenly or unevenly. Invest the determined amount in each CD, choosing different terms.  For example if you have $30,000, invest $5,000 in each a 6, 12, 18, 24, 30 and 36 month term CD. When each CD reaches maturity you can either reinvest or take out any money that you may need.

Laddering CDs is popular during an economy where rates change frequently. Remember to ask financial institutions what their pre-payment penalties are on CDs.  Many people favor investing in a longer term CD to get the best rate and take the risk of paying an early withdrawal penalty due to the low penalties.

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UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



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What entrepreneurs are doing for Kansas City

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Today’s entrepreneurs are as excited as yesterday’s. They’re going to take us into the future and help build a thriving economy in Kansas City.

Here are more of my thoughts on Kansas City as we build the most comprehensive and effective entrepreneurial ecosystem anywhere in America.

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Mr. deSilva is president and chief operating officer of UMB Financial Corporation. He is also vice chairman of UMB Bank, n.a. Mr. deSilva joined UMB in January 2004. He is primarily responsible for UMB's fee-producing business units and product lines, including Scout Investments; UMB Fund Services, UMB Healthcare Services Payment Solutions, Prairie Capital Management. Additionally, he is responsible for all corporate operations, technology, properties, security and marketing.



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Veterans Day

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As we use Veterans Day to honor the many people who have sacrificed for us, we’ve been reflecting on what else we can do to better serve our veterans.

Our new job portal is geared specifically for those with a military background. It’s one way we’re trying to connect with veterans, but like many of you, we’re always looking for ways to thank these service men and women.

What ways have you seen organizations succeed in serving individuals and families connected to the military?

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Mr. Kemper is the chairman and chief executive officer of UMB Financial Corporation and UMB Bank, n.a. He joined UMB in 1997. Mr. Kemper is active in both civic and philanthropic endeavors. One of the causes he is most passionate about is the arts. He currently serves as a trustee and executive committee member for the Denver Art Museum and is a past board member for The Arts Council of Metropolitan Kansas City.



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Financial Word of the Week: Certificate of Deposit

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FWOTW

Certificates of Deposit (CDs) are a type of savings account that generally earns you a higher interest rate than other bank accounts because you are restricted from withdrawals or deposits. You are guaranteed to earn a set interest rate throughout the term of the CD.  Most institutions have CDs that range from 30 days to multiple years. If you do withdraw money from the account, you may have to pay early withdrawal penalties.

CDs were authorized in the 1960s and gained popularity during the inflation period of the 1970s because of their attractive rates. They are also insured under the Federal Deposit Insurance Company (FDIC) guidelines. Given today’s low interest rate environment, you may need to weigh the benefits of being locked into a term. If rates go up, you will be stuck in a low interest rate account or pay the penalties for early withdrawal.

Example
The highest average advertised rate on a one-year CD is 1.00% Annual Percentage Yield (APY). With that rate, it would take you 72 years just to double your money with compounding interest. Or more realistically, if you kept $1,000 in a CD for 10 years, you would only earn approximately $100 in interest. However, if you have a specific goal and time period you’re saving for, then a CD investment could make sense for you.

Next week we’ll explain how to ladder CDs and how it can help you.

 

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When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



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Manufacturing and Technology: Attracting a New Workforce

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IndustryInsights_blog_555x19
Last month our expert panelists explained how they find the right employees for their organizations. Now these manufacturing and technology industry leaders tackle the topic of education and attracting the next generation to the workforce.

Kim Maddigan (CEO, AdamWorks) says the industry needs to reintroduce manufacturing as an appealing career option for young people in the United States. The panelists also discuss whether or not internships and job shadowing are a helpful approach.

Panelists:

Jon Kinning, COO, RK Mechanical, Inc.
Kim Madigan, CEO, AdamWorks
Bill Newland, CEO, Hercules Industries
Kevin Fink, CEO, Ice-O-Matic

Moderator:

Bart Taylor, Founder/Publisher, Company Week

Next month, we’ll bring you the panelists’ answers to some frequently asked questions.

 

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When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



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