From the July-August 2010 issue of Treasury & Risk magazine

Saving Trees and Fees


Two years ago, Chico's, a clothing chain with 1,100 stores and $1.7 billion in annual revenue, faced the traditional retailer's dilemma--vast numbers of depository accounts scattered across the U.S. More than 1,200 paper statements arrived in the mail each month, detailing fees totaling more than $1.2 million a year. Chico's seven treasury staffers could give the statements no more than a cursory look.

But with new automation, Fort Myers, Fla.-based Chico's now gets all but 10 of its bank statements as electronic transmissions and can analyze its fees. Chico's saw a 23% reduction in bank fees that is saving it nearly $300,000 a year, says Jeanne Peaslee, manager of cash management. "The software more than paid for itself in the very first year."

Chico's cure was two Chesapeake System Solutions products--Internet Data Manager for the electronic transmissions and SmartAnalysis for fee monitoring.

"Bank fee analysis software has become very popular in the past two years, especially among retailers, because they deal with so many banks," notes Stacey Gilmore, a treasury management consultant for Owings Mills, Md.-based Chesapeake, which splits the fee analysis software market with Weiland Financial Group in suburban Chicago.

Analyzing Chico's bank fees was revealing. "We were paying fees we didn't even know existed," Peaslee says. Accounts Chico's had closed were still carried on banks' books as inactive accounts, for which it was being charged. That stopped.

Chico's was also paying to have bank statements cut to match its fiscal year. "We had no idea they were levying those hefty charges," Peaslee says. "We immediately switched to a calendar year for bank reporting."

While electronic transmissions and fee analysis software have been available for years, the recession and corporate cost-cutting got Chico's moving. "Bank fees were a conspicuous cost for our team, so we looked at them," Peaslee says.

She found that banks would sometimes increase charges without notice. Now the software flags any price changes and lets Peaslee take action. At least once a month, she finds that Chico's has been incorrectly charged for something.

Treasury is employing the reliable data provided by the software to negotiate better fees, Peaslee says. It is also using the data to make smart choices as it consolidates its banking relationships (from six primary banks to three), and selects banks rather than leaving that up to store managers. "When we open a store, we tell the store manager where to open the account," Peaslee says, "rather than letting managers pick whichever bank is most convenient."

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