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"Financial communication" – many SMEs see this primarily as a task for publicly traded companies. However, it is also of great importance for medium-sized businesses, especially when a company finds itself in a difficult economic situation. Companies that proactively implement transparent bank communication and thus build a strong relationship with their bank (creditor relationship) have a significantly better standing. Excellent financial communication with regular reporting improves access to capital and loan terms. It strengthens the bank's trust in the company and can pave the way for better overall support.
Act, don't react.
A common principle in the daily life of SMEs: If the company is doing well, the bank hears from it regularly. If the company is struggling, there is radio silence. This makes the bank suspicious and undermines the foundation of trust that has been built. For banks, not hearing from a business is an alarming sign. As the saying goes: "Banks can handle risks, but no surprises." No bank wants to be left to "clean up the mess" later. Proactive, swift action is crucial.
As a foundation for bank communication, a reporting cycle can be established when credit is granted. In a difficult economic situation, transparency and honest communication with lenders create a vital head start. A self-assured demeanor from the entrepreneur, who maintains control even in difficult situations, also underscores their competence and dispels any doubts the banker may have about the company's ability to successfully overcome the crisis. The chances of receiving support during a crisis are increased through active, transparent bank communication, as the bank can assess the risk at any time.
It’s not just about the financials
To maintain trust and transparency in every phase of the company, the golden rule is: communicate permanently and openly with banks—even during a crisis. This means facts are published regularly. Continuity in financial reporting is important. But it is not just the numbers that are interesting; so-called "soft facts" matter too. These include a high-performing team, a stable network, or a strong position with customers. These are just examples. In bank communication, the "total package" is what convinces. If you report clearly and honestly about competencies, strengths, and the company's good performance, it can be the deciding factor in banking decisions.
Financial communication in practice
The most important format for bank communication is the annual financial statement. Here, there is the opportunity to provide the bank with a balance sheet analysis via an interface. How exactly this interface between the company and the bank is structured depends on the respective framework conditions. Financial ratios, risk reports, business prospects—the scope of reporting also depends on individual structures and processes. Digital tools and automated processes ensure transparency and professionalism, making relevant, up-to-date information available at all times.
The ABCs of bank communication
• Structured information & open communication
• Create a positive negotiation atmosphere and put yourself in the other person's shoes
• Keep the reins in your hands: Don't react—act! Don't provide every detail in a rush, but provide relevant information in a timely manner. Report on particularly important milestones and positive prospects.
• No fear-mongering, no sugarcoating: Stay sober and honest. Up-to-date, transparent cash management is essential for truthful reporting.
• Punctual annual financial statements and daily updated bookkeeping are an important basis for trustworthy and credible communication
• In a crisis: Observe legal communication obligations for management and the board
• Communicate not only financial facts but also soft facts
The financial experts at THE MAK`ED TEAM provide the necessary foundation for transparent financial communication through professional liquidity management. We implement relevant structures and processes to ensure continuous and active financial communication. The interface between the company and the bank is designed to ensure smooth operations. Relevant information is communicated in an error-free format, and we address the bank's communication requirements. This ensures that the bank is satisfied and trust in the company is maintained. Emotional aspects are also taken into account in our communication—because, alongside factual arguments, they form an important pillar of trustworthy financial communication. During implementation, we lay the groundwork for a positive dual effect: the company can review and continuously optimize its management tools in this context. This builds further trust with financiers and business partners.
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