What is a bank charge?

A bank charge is any fee assessed by a bank for account services, including monthly maintenance fees, transaction fees, wire fees, and penalty charges. For professional service firms, bank charges are operating expenses that should be monitored, recorded, and minimized where possible.

Key characteristics

• Fees from the bank

• Various charge types

• Reduce account balance

• Must be recorded

• Often negotiable

• Affect profitability

Why it matters for professional service firms

Bank charges reduce available cash and affect profitability. Many charges are negotiable or avoidable with a proper account structure. Professional service firms should review bank charges monthly, negotiate better terms, and structure accounts to minimize unnecessary fees.

Real-world example

Tom reviewed annual bank charges: monthly maintenance $180, transaction fees $420, wire fees $375, NSF charges $105, and analysis fees $240. Total: $1,320 annually. Negotiation: switched to business account with maintenance waived at $10,000 average balance, reduced transaction fees. Annual charges reduced to $680. Savings of $640 from one conversation with a banker.