Are you Using Online Banking for Your Practice?
by Corporate Relations and Business Strategy and Communications Staff
Practicing psychologists are increasingly turning to the Internet to conduct a wide range of business activities, from claims processing to marketing their practice. One online business activity that is growing in popularity is online banking, or using a computer to access financial account information and perform banking transactions through a financial institution’s secure website.
This article outlines potential benefits as well as recommended precautions related to online banking.
Benefits of Online Banking
Being able to quickly and easily access account information and conduct banking transactions can offer practitioners more time to spend with clients or addressing other business matters. Because financial transactions are posted online as they occur, practitioners can easily track and monitor their account activities, which can aid in budgeting and financial management.
In addition, online banking can offer cost savings by eliminating the expenses associated with paper bill paying. Additional savings may results from discounted prices for online services that some banks are offering to attract customers.
A Range of Services for Practitioners
Online banking services vary by financial institution, but many banks offer the following options that may be of particular interest to practitioners:
- Pay bills online. Use this service to review and pay bills from your online account. This relatively quick and easy procedure allows you to access and track your payment history with specific vendors and also saves you the cost of postage and checks. Some payees can even send electronic bills, relieving you of the hassle of processing paper statements. You may also be able to arrange for automatic payment of a variety of bills on particular days of the month, as well as schedule payments ahead of time when you plan to be away from the office to ensure that your bills will be paid in your absence.
- Download your online account information, including a detailed transaction history, into financial management software, such as Quicken, QuickBooks or Microsoft Money, or spreadsheet software. This service can help you to quickly and easily reconcile your accounts without having to manually enter each transaction.
- Request automatic notification. For example, you may request to be notified via email if your account balance goes above or below a specified amount. This can help guard against overdrafts or warn you about suspicious account activity.
- Conduct standard banking transactions over the Internet. For example, you may request that the bank stop payment on a check or order new checks via e-mail, instead of having to call or visit the bank. In addition, you may access and transfer funds among multiple accounts, both business and personal, view and print your account statements and view images of paid checks.
Some banks offer special online banking packages designed for small businesses. Depending on your banking needs and the services offered, you may want to consider a small business account for your practice. Services may include the option to pay your employees electronically through direct deposit and electronic payment of federal, state and local taxes.
How Much Does Online Banking Cost?
Many banks offer online banking services and electronic account statements at no cost, if you meet a qualifying account balance or you open a particular type of account that offers online banking as a benefit. Check the details of online banking packages so you are aware of fees that may be applied to particular services.
When considering online banking services, it is important to find out:
- if there is a charge for setting up or closing an account, as well as any related technical requirements
- whether special software or hardware is required, and the related costs. Typically, setting up an online banking account is a fairly quick and easy procedure that requires only a computer and an Internet connection
- how to correct errors you might make — such as paying a bill twice by mistake or entering the wrong payment amount — and any fees associated with these types of errors
Is Online Banking Safe?
Online banking uses encryption, a form of invisible coding, as well firewalls, to protect your information from third parties. Typically, a password and personal identification number are required to log in to an online bank account. Most banks offer additional protections, such as automatically logging you off the site after several minutes of inactivity or when you leave the site without logging out of your online bank account.
Reputable banks have security measures in place to secure the personal and financial data stored in online accounts. However, data security is a serious concern for both banks and consumers, especially following a reported rise in identity theft over the past few years. Banks are constantly challenged to implement anti-fraud measures to protect financial accounts from a host of potential security breaches, ranging from the theft of printed bank statements from mailboxes to the unauthorized use of stolen ATM debit cards.
If you decide to bank online, some steps that you can take to help safeguard your online account information include:
- Access your account only from a trusted computer using a web browser that supports online banking encryption technology (this includes most current browsers, including Internet Explorer 6.0). Make sure the browser’s security and cookie settings are adjusted appropriately for your protection. In addition, make sure the computer has current virus protection and a firewall installed and enabled to help block unauthorized users from accessing the computer.
- Use a password that contains at least six characters and a mixture of letters and numbers. It is a good idea to use a password that you do not use for other online accounts, and to change the password every one to two months.
- Monitor your account for signs of suspicious activity.
- Never respond to unsolicited e-mails or phone calls requesting personal financial information or your social security number — even if the person requesting the information claims to be from your bank. Computer hackers may use so-called “phishing” tricks to persuade consumers to reveal their online bank account numbers and passwords.
Visit the Federal Trade Commission website for more information about protecting your personal information.
Weighing Your Options
In researching your online banking options, start by finding out what services your current bank offers. Many banks offer free demonstrations of their online services through their websites or local branches.
Before signing up for online banking services, consider the following questions:
- Do you understand the features that are available and the costs associated with each service that you might use?
- Can the bank confirm that online transactions are processed in a timely manner?
- Does the bank offer a guarantee that covers unauthorized charges to your account that may a result from a banking error or security breach?
- Does the bank offer adequate customer service? When you need assistance, will you be able to communicate directly with a bank representative by e-mailing, calling or walking into a local branch? Are representatives available during convenient hours, and will they respond quickly to your concerns?
Online banking is an increasingly popular tool that can help psychologists effectively manage the administrative demands of running a practice. It can save practitioners both time and money and can streamline the financial management of the practice. In considering whether to incorporate online banking services into your practice, focus on identifying and finding the services that best meet your needs and the needs of your practice.
PLEASE NOTE: The service providers and products mentioned here are provided simply as examples and do not constitute endorsements by the APA Practice Organization. There are other similar products and services available that are not identified in this article.