Taking stock: Tips for measuring your business’s financial wellness

As 2022 comes to an end it’s a perfect time to pause and take stock of various aspects of our personal and professional lives, including banking and finance.

“We encourage on an annual basis that businesses take a step back and contact their advisors for a financial wellness review,” said Thomas Dunning, vice president, relationship manager, at Evans Bank, a Buffalo-based full-service financial institution with locations in Fairport, Penfield, Perinton, and Irondequoit. “On an annual basis, the customer has the ability to bring forward all the issues facing them, whether it’s within their business or their operating environment.”

And, from indicators of an impending recession to record high inflation and continued supply chain and labor issues, 2023 is shaping up to include many issues businesses will want to get ahead of now. Proactively addressing these issues with a strong advisory team in place – including an insurance agent, attorney, accountant, and banker –  is key according to Dunning and other local community banking professionals.

“There are a lot of potential headwinds and it will be important for business owners to have their eyes wide open going into next year,” said Bob Cieslica Jr., senior vice president and Rochester regional manager for business and professional banking for Buffalo-based M&T bank, a multi-state community-focused bank founded in 1856. “Make sure you have a banking relationship with someone who understands your goals and needs and has experience in your industry.”

Another tip Cieslica has for businesses going into 2023 is to have a solid understanding of their cash flow and liquidity and access to capital like a line of credit from their bank. He also encourages businesses to be mindful of cybercrime and to have proactive security systems and fraud prevention tools locked in, as well as have cyber insurance in place should a breach or attack happen.

PwC’s Global Economic Crime and Fraud Survey 2022 reports that 46% of surveyed organizations experienced fraud, corruption or other economic crimes in the last 24 months. Of those organizations experiencing fraud, 70% reported that it came from an external attack or collusion from external and internal sources. Among the emerging threats the report noted businesses should be aware of are ESG reporting fraud and supply chain fraud.

In their Thwarting the Cyberattack Resources and Insights article, M&T Bank presents other emerging cybersecurity trends businesses should be aware of, including spear phishing and whaling (typically conducted by email), ransomware (a form of malware that can or lock files on a computer or network), mobile malware (malware designed for Android and Apple devices) and social networking trickery, like promoting an article link to a website with malware.

Tips Dunning has for businesses in the year ahead include assessing capital needs, revisiting long-term objectives, examining depository services, ensuring emergency operating plans are thorough and up to date, and keeping the lines of communication with one’s advisory team open.

“Be proactive with your banker — reach out to them routinely and on a continuous basis and if you have any concerns bring them forward. Your banker can help you craft solutions,” said Dunning, who notes Evans Bank makes it a priority to meet with customers at their place of business so they can learn even more about their business and how they operate and customize better solutions for their individual needs.

Harry Powell, CFO of One Stop Janitorial and Office Supply on Scottsville Road in Rochester, is a case-in-point of a business owner who understands the value of having a strong working relationship with his community banker and is passionate about encouraging other businesses to do the same. One Stop is a provider and distributor of items like office supplies and furniture, cleaning products, safety equipment, and promotional items, for other businesses.

“I see my banker once a month,” Powell said. “It’s important for any business — small or large — to have that relationship because none of us knows what’s around the corner. It’s as important as having an attorney or an accountant — a good banker is a must-have piece.”

Powell has been a business client with Canandaigua National Bank — a local full-service, community-owned financial institution founded in 1887 — since 2011. He found great comfort in the relationship he already had in place with the bank when the COVID-19 pandemic hit.

“When your business almost stops instantly and everything closes down there’s a fear there,” Powell said. “We relied on Canandaigua National Bank during that time and they were extremely helpful, especially with navigating the somewhat complicated PPP loans and the forgiveness aspect of them. It was a good time to have a bank we already had a trusted relationship with.”

Looking at the economic uncertainty of the year ahead, Powell notes continued concerns about labor costs and high interest rates but is overall positive and feeling prepared. Weathering the COVID-19 pandemic has given him added confidence in the resiliency of his business and other businesses that have the right support in place.

“Everything goes in cycles,” he said, about the economy. “Looking out six months to a year from now is important — reach out to your bank if you have concerns. Don’t wait until the last minute.”

Caurie Putnam is a Rochester-area freelance writer.