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Target Balance Accounting
Target Balance Accounting Service
If your company maintains several Demand Deposit Accounts (DDA), each of which perform and control different functions (general payables, payroll, receivables from lockbox or petty cash), a First Southern Bank Target Balance Accounting Service is a simple way to obtain centralized control and maximize the use of your business funds each day.
The object of the Target Balance Accounting Service is to reduce the time and effort required to manage your depository and disbursement accounts by consolidating your funds into a single concentration account, then automatically funding your operating accounts on an as-needed basis. For your company, that means the right amount of cash, in the right place, at the right time.
With First Southern Bank’s Target Balance Accounting Service:
- Deposits made to your collection/receivables account(s) are automatically transferred at the end of each business day into a single concentration account to maintain the target balance (even zero) in each of the sub-account relationships.
- When checks against your individual disbursement accounts are presented for payment, funds are automatically transferred from your concentration account on an as-needed basis to cover each check.
- Daily account activity and monthly statements are detailed by account and available online through BizBanc, First Southern Bank’s Business Internet Cash Management Service. Statement activity and balance information are also available through e-Statement, as a green alternative to receiving your paper account statement.
- Excess collected balances in the concentration account not needed daily to cover disbursements or compensate the bank for non-credit services in account analysis can be channeled to earn short-term interest income through a sweep account option.*
Advantages of Target Balance Accounting at First Southern Bank includes:
- Centralized control of cash.
- Improved accounting control.
- Reduced workload regarding funding and managing accounts.
- Allows independent functioning of business operations.
- Can accommodate investing in a short-term sweep option via the concentration account.
* This is not a deposit or other obligation of, or guaranteed by the bank, and is not insured by the FDIC or any other Insurance Organization, and is subject to investment risks, including possible loss of principal invested amount.