SMARTER STRATEGIES

Banking in Style

Dennis McCafferty | Date: 06-29-10 | Comments

A top fashion retailer is saving hundreds of thousands of dollars in banking fees thanks to an analytics solution.

There�s a downside to being a red-hot, billion-dollar apparel business�really. Beyond the clothing perks and interactions with stunning models, there can be an overload of banking information to process. Chico�s FAS knows this first hand: As it posted net sales of $1.7 billion a year, it also received more than 1,200 multipage bank statements a month.

Now, if Chico�s were like the rest of us, who generally ignore the statements or�at best�give them a cursory read, it would continue to rack up hundreds of thousands of dollars lost to fees that it shouldn�t have to pay. The Ft. Myers, Fla.-based company allowed each of its 1,100 individual store locations to establish a depository account at a bank that was geographically convenient. And while many of these accounts were capable of being combined into a master corporate account, staff could really only review charges for what the company calls �overall reasonableness.� There was no attempt to compare charges across banks or analyze volume to pursue discounted bank fees. The annual tab in fees amounted to $1.2 million.

That�s why Chico�s turned Chesapeake System Solutions� SmartAnalysis bank-fee analysis software and Internet Data Manager (IDM), which automatically retrieves bank data over the Internet. SmartAnalysis allowed Chico�s to track and analyze bank fees, verify information, and identify possible red flags. Based in Owings Mills, Md., the Chesapeake solution discovered, for example, that Chico�s was still getting charges from accounts that had been closed. There were also fees that represented increases over prior ones, yet were imposed without any notification�such as one to investigate banking discrepancies that increased by 50 percent in one month.

�SmartAnalysis allowed us to identify a number of opportunities to reduce the fees we were paying,� says Jeanne Peaslee, who oversees cash management for Chico�s. �We operate on a fiscal-year calendar, for example, so we requested that our bank statements be cut for our fiscal year. Banks were assessing hefty charges to provide this service. Once we analyzed these fees, we immediately moved to a yearly calendar for bank reporting purposes, and now use Chesapeake IDM whenever we need to pull fiscal year balances. Also, with SmartAnalysis, we can tell whether each account is being charged the same amount month to month.�

The solution from Chesapeake also allowed Chico�s to analyze overall cost structures with its banking partners, which turned out to be a great negotiations tool. �It helps us lower our banking costs,� Peaslee says. �We know the banks to which we want to migrate. Now, when we open up a new store, we tell the manager where to open the depository account, rather than saying �Use whatever bank is closest to you.�� Overall, Chico�s estimates that it�s saving more than $300,000 a year since launching the solution.

National Life Group, based in Montpelier, Vt., is another company benefiting from the tools. After it posted $850,000 in annual fees stemming from its 50 separate bank accounts, it sought a better way. Previously, Senior Cash Management Specialist Nancy Leclerc manually inputted the statement data from 50 separate bank accounts into an Excel spreadsheet, which took several days. Even after that effort, extensive analysis wasn�t possible. So National Life also invested in the Chesapeake System solution package and�after installing within 30 minutes�discovered several accounts that were not needed and closed them, saving monthly maintenance fees. It also used the tools to pinpoint where the most affordable banking services were, allowing the company to better negotiate for the cheapest fees, as Chico�s did.

�You don�t even need a user�s manual to get this working,� says Leclerc, who estimates her company saved $100,000 through a combination of reducing bank fees and eliminating manual data inputting. �Anyone from the treasurer to the treasury staff can log on and obtain the precise bank-fee information needed.�