Online banking has been around for more than thirty years. However, most of it was inter-bank transactions. One bank transferred money electronically to another. Clients couldn't do it. The Internet has changed this dramatically in the banking client's favor.

Most banks and other financial institutions now offer secure connections to accounts by clients. With online banking, you can check account balances, verify deposits, transfer money between accounts, pay bills, and access lines of credit. Best of all, you can do it from the convenience of your desktop, laptop, or Blackberry from anywhere in the world.

To use online banking, you first must have an account with a bank that offers this service. Most do. In fact, many are very helpful in helping you set up a secure online banking account that you can manage from your computer. They even have client service personnel dedicated to helping you with online transactions.

Online Security

The reason online banking is viable is because security tools and common sense make the transactions secure. Your banker can explain how their security system works. Most use a two-step security process that may require that you not only know your account name and password, but also register your computer electronically. If the system doesn't recognize your computer, you will be asked additional security questions (mother's maiden name, birth city, favorite pet, etc.).

Obviously, banks want your trust. Transaction security systems are established to earn and maintain that trust. You must also use common sense when banking online. However, once you learn how your bank's system works and have secure tools, you will be able to better manage your business with online banking.

Convenience

Online banking is more convenient than teller banking. For example, you can establish direct deposits with your clients so that they can electronically pay your invoices without having to write and mail a check. The money is automatically and securely transferred from their account to yours.

In addition, you can establish automated bill-paying services with your suppliers. Once a month, your office supply company e-mails you an electronic invoice for all purchases, and you approve payment and indicate a payment date. The money is then transferred from your bank account to the supplier's account on the indicated date. No stamps necessary.

If you have employees, you can pay them electronically on the designated payday. Their wages or salary, less deductions, are automatically transferred to their banking account. Payroll taxes are electronically sent to the appropriate agency.

Accounting Software

Online banking is made even easier because most popular accounting software programs can be used to transfer funds to and from your bank. The software is developed using banking data standards that make the flow easier and more accurate. For example, QuickBooks can access a Bank of America business checking account to transfer funds and update your accounting records.

You can learn more about online banking from your banker. Some offices offer introductory classes. Others have online instruction that makes the process easier. Remember that it is up to you to protect your security passwords and not give them to anyone who may abuse your bank account. With that caveat, online banking can make good records easier to manage.