Looking for a secure place to invest money for yourself or your employees? Jan 08, 2015, 8:00 am By Heidi Carmack Pfaffroth

Whether you’re thinking of yourself or investing for employees, it’s easy to feel overwhelmed or discouraged when you start thinking about or reading about retirement savings. Even if you’re thinking this topic is a little heavy for what you want to focus on today, give it a chance. Opening an Individual Retirement Account (or IRA) may be easier than you think. Read this short article for an overview of how to get started, with the tools to do it built right in.

First, decide which type of IRA you want to open. Here are the types Bank of American Fork offers:

• If you think you’ll be in the same tax bracket upon retirement and you want to pay taxes on the income later, consider: Traditional IRA. Allows contributions of pre-tax income. Taxes are paid upon distribution.

• If retirement isn’t in your near future but you want to save a little from each paycheck, and you anticipate an increase in your salary as you get closer to retirement, consider: Roth IRA. Allows contributions of after-tax income, if qualified. Qualified distributions of principal and interest are tax-free. After retirement, distributions are not required.

• If you’re the sole owner of your business, consider: SEP IRA. SEP stands for Simplified Employee Pension. It allows a business to make contributions toward its employees’ retirement using IRAs. These are especially popular with sole proprietors, where the business owner and the employee are the same person. SEPs allow a higher maximum contribution (25% of compensation up to $50,000) than a Traditional or ROTH IRA.

Then, decide how much you can afford to contribute right now and out of each paycheck. Variable-rate IRAs require only $10 to open, while fixed-rate IRAs can be opened with either a $500 or a $5,000 minimum opening deposit. Either way, Bank of American Fork’s IRAs are held in CDs, not in the stock market, so you’re guaranteed a steady return and are covered by FDIC insurance. Unlike some banks, we don’t charge you holding fees or an annual fee.

You can open your IRA by visiting one of our 14 branches or by calling 800-815-BANK.

Once you decide how much you can afford to contribute each month and set up an automatic payment (your banker can help you set that up), give yourself a few months to get used to living without that money in your pocket each month. Once it feels normal, increase your contribution.

Saving for retirement might feel overwhelming, but getting started by simply opening an IRA and setting up a contribution will put you on the right track. You’ll feel more prepared and be more prepared.

We’re excited about Apple Pay—here’s why. Jan 06, 2015, 6:10 am By Heidi Carmack Pfaffroth

Near-field communication makes it difficult for fraudsters to exploit using debit and credit card numbers.

We are pursuing Apple Pay™ with our credit and debit card processors so we have the cards available to use with Apple Pay once Apple’s® upcoming roll-outs happen. We anticipate being able to offer Apple Pay processing during the first or second quarter of 2015.

This new technology aims to increase the layers of security in place to keep your money secure. Here’s how it works:

Apple Pay uses near-field communication (NFC), which is difficult to eavesdrop on, and debit and credit card numbers are not shared with merchants, lessening the risk of fraud using those numbers. Although fraudsters are always looking for new ways to exploit, we are also constantly looking for new and improved ways to protect our customers.

Users can pay by holding their iPhone® 6 near a merchant’s contactless reader. Users can also use Apple Pay to pay within apps. Near-field communication is a form of short-range wireless communication where the antenna used is much smaller than the wavelength of the carrier signal. The very short range of NFC is what makes it difficult to eavesdrop on.

iPhone’s Passbook® will store debit and credit card information for users. With Apple Pay, instead of using actual credit and debit card numbers when a card is added to Passbook, a unique device account number is assigned, encrypted and stored in a dedicated chip in iPhone. According to Apple, these numbers are never stored on Apple servers. When a purchase is made, the device account number and a transaction-specific dynamic security code are used to process the payment—instead of the actual credit and debit card numbers. This is one more layer of security for Apple Pay users.

We’re as excited as you are, so we’ll be sure to let you know when it’s available!

Are you a business owner who would like to offer customers the ability to make purchases using Apple Pay? We can offer the technology and the near-field communication (NFC) reader equipment you need to accept Apple Pay. Call 800-815-BANK for more information about accepting Apple Pay and for a quote on merchant services including Apple Pay.

Apple Pay is a trademark of Apple, Inc. The Apple logo, Apple, iPhone and Passbook are registered trademarks of Apple, Inc.

You’ve probably spent some considerable time thinking about how you can improve efficiency in your business next year. Have you considered what you’ll do to improve the working environment for your employees? A recent study shows that employees who are happy or feel satisfied are 12 percent more productive.

So what can you do to make or keep employees happy and satisfied?

Make sure work areas are comfortable. A study by Staples shows that office ergonomics can improve productivity and well-being. A whopping 86 percent of people report some discomfort from office furniture and equipment. When you consider the cost of upgrading work stations to include ergonomic chairs or standing desks (since studies show that sitting might be the new smoking), remember to weigh it against the benefit of happier, more-productive employees.

Consider allowing telecommuting or more-flexible work hours. Employees who are given flexible hours or allowed to telecommute may be more loyal, according to this study. When you consider the high cost of turnover, it may seem worth it to make room in your policies for flexibility and telecommuting.

Eliminate office politics. Making the lists of top reasons people quit over and over again are things like: not feeling respected by coworkers or supervisors, not getting along with coworkers and other office politics. Consider how you can improve the environment in your office and help people to get along. This may be the hardest change to make—just figuring out what the problem is can be tough. Try starting with an employee survey. Encourage employees to be honest with their answers. Then, make sure you do something about the issues they feel are important.

This year, consider improving your office environment to increase productivity. You may end up happier and more productive yourself!

Optimizing Your Cash Flow Using Open-Book Management Dec 12, 2014, 10:50 am By Heidi Carmack Pfaffroth

Guest post by Richard H. Tyson, CEObuilder

Guest blogger Tyson is starting a series here about open book management. Make sure you check back for additional articles!

My past two articles stressed the advantages of open-book management. In the first, I discussed the importance of identifying and regularly displaying key performance indicators (KPIs) to fully engage employees in delivering desired business outcomes. In the second, I suggested a few essential metrics from the income statement. Today, I want to address a few equally critical KPIs regarding cash flow. These deal primarily with your cash conversion cycle.


The cash conversion cycle is a function of key metrics taken from both your income statement and balance sheet, through which a handful of crucial ratios are calculated. The combination of these ratios gives a strong portrayal of any company’s ability to service its current obligations—and the working capital required to do so. They include the following:

Receivables Turns:                                                                   Annual Sales

                                                                                                 Accounts Receivable

This gives the number of times receivables turn over each year. For example, a company with annual sales of $1,200,000—and $200,000 in receivables—turns over its receivables 6 times a year.

Days Cash Tied Up in Receivables:                                          365 (days in a year)

                                                                                                    Receivables Turns (from prior ratio)

This shows the average number of days it takes your company to collect its receivables. Using receivables turns (6) from the prior example, it takes 61 days, on average to collect monies due.

Inventory Turns:                                           Annual Cost of Sales (COGS)


This ratio gives the number of times inventory turns over each year. For example, a company with COGS of $600,000—and inventory of $200,000—turns its inventory 3 times a year.

Days Cash Tied Up in Inventory :                               365 (days in a year)

                                                                                       Inventory Turns (from prior ratio)

This shows the average number of days it takes your company to sell its inventory. Using inventory turns (3) from the prior example, inventory sits on the shelf 122 days before being sold.

Payables Turns:                              Annual Cost of Sales (COGS)

                                                    Trade Payables

                                                          (payables associated with COGS)                                                   

This gives the number of times trade payables turn over during a year. For example, with annual COGS of $600,000—and $50,000 in payables—your company turns over its payables 12 times a year.

Days Cash Freed Up in Payables:                                                 365 (days in a year)

                                                                                                             Payables Turns (from prior ratio)

This ratio shows the average number of days it takes to pay your bills. Using payables turns from the prior example (12), it takes 30 days to do so.

We now use each of the “days ratios” together in constructing your cash conversion cycle. The formula for that important metric is:

Days Cash Tied Up in Receivables


Days Cash Tied Up in Inventory


Days Cash Freed Up in Payables

Using the numbers from our example, the cash conversion cycle for your company would be 153 days (61+122-30). Knowing this, we can calculate the working capital required to finance the business. This is based upon the company’s annual sales of $1,200,000, or an average of $3,288 per day.  By multiplying sales per day by the cash conversion cycle days, we come to a working capital requirement of $503,000.

Beyond the value of knowing the working capital required to run your business, this information provides critical KPIs to be shared in your use of open-book management. Because the cash conversion cycle is a function of lagging indicators, it can be improved—if we understand leading indicators that drive it.


Under an open-book environment in the example above, our AR and purchasing personnel would likely take action to improve the KPIs for both days receivable and days inventory. AR might reduce days receivable to 50 days through more aggressive collection processes, and purchasing—through a new “just-in-time” system— might achieve a 20% reduction in inventory.  Assuming no change in how we pay our bills, the cash conversion cycle would improve to 117 days (50+97-30), a reduction of 36 days. This equates to of $118,368 less working capital required—and a company with a much healthier cash position, much improved liquidity, happier bankers, and owners who now sleep better at night!


Anyone who runs a company knows that “cash is king”—and that owners and officers of businesses sweat bullets over the cash in their companies. That said, too many don’t share that concern with their employees—and empower them by openly sharing the both leading and lagging KPIs. Armed with this information, open-book managed companies almost always find that employees contribute in new and significant ways to both the profits and cash flow of their businesses.


Richard Tyson is the founder, principal owner and president of CEObuilder, which provides forums for consulting and coaching to executives in small businesses. For 22 years, CEObuilder has successfully brought about an outstanding financial return for CEO and executive clients through providing leading-edge content in the areas of strategizing, team-building, problem-solving and managing for results, as well as the use of proprietary learning and coaching models

Bank of American Fork VISA® Business Rewards credit card Nov 24, 2014, 9:19 am By Heidi Carmack Pfaffroth

Bank of American Fork VISA® Business Rewards credit card

With the Bank of American Fork VISA® Business Rewards credit card, you can have the convenience of a global card, with local service. If you’re looking for a credit card with points for business purchases that add up quickly and rewards that actually make sense for you, this card is competitive.

Here are some of the rewards that make it just a little easier to run a business:

• One reward point for every two dollars spent

• Reward points can be redeemed for merchandise and/or travel

• No specific airline you have to use for reward travel

• No blackout dates on reward travel

• No cap on annual rewards earned

• No fee for rewards

• Other perks include concierge service, up to $1 million automatic travel accident insurance and fraud monitoring.*

Our VISA® Business Rewards credit card is also ideal for international travel. You’ll save money with better currency exchange rates and can use the card anywhere in the world VISA® is accepted.†

Most businesses today use a credit card for their business expenses. Why not use a card with a low, fixed rate and a rewards program with no annual fee?

There is no cost to obtain a VISA® Business Rewards credit card. However, the following rates and fees apply and is subject to credit approval:

• Fixed 9.90% rate on purchases

• Fixed 14.90% rate on cash advances and balance transfers

• Late payment fee: up to $30.00 late fee every 30 days until the account is brought current

• Return-payment fee: up to $25.00

• Cash advance fee: The lesser of $30.00 or 4% of amount advanced ($3.00 minimum)

• Foreign transaction fee: 2% of each transaction in U.S. dollars

• Expedited mail request fee: $25.00 per credit card

• Over Limit Fee: $35 per month

• There is no grace period on balance transfers or cash advances.

* Limitations apply. See Guide to Benefits.

†Fees may apply.

VISA® is a federally registered trademark of Visa.

Training Skills Series: Training others to conduct training Nov 21, 2014, 8:00 am By Heidi Carmack Pfaffroth

Guest post by Ken Burnett, VP/ Director of Training and Business Development, Bank of American Fork

This series is written from experience and is part of Bank of American Fork’s training program. The program embraces the philosophy that training is a skill-based job, and managers need to learn specific skills to be successful.

Training professionals have limitations in the types of training they are able to single-handedly provide.  Content may be very complex or specific or there may be too many training sessions to handle on your own. It may be helpful to have others in your organization assist in the process, but be sure you’re still involved in consulting with and helping your associate.

Often, a subject matter expert training without assistance will skip to the parts of the topic that are cool or difficult. They may be so comfortable with tasks that they don’t remember to include context or the basic sequence of a task. Just like you, a training professional, wouldn’t be in charge of the accounting or auditing process without guidance, your associates should be in charging of training without some guidance.

However, it is critical that you maintain good relationships with your business partners.  Meet with them on a regular basis to understand their pain points and how you can help. Be prepared to add value to what they are trying to accomplish.  A job aid, job analysis or performance analysis can provide stand-alone value for any department. Most importantly, let them be involved in the training process.

For developing and delivering training, there is a scale of involvement from other groups within your organization. First we will look at partial involvement and second, training that requires another department in your organization to take the lead. For training to be successful, many different departments need to contribute. The following table will help guide you in determining what role the training department and other departments will play.

Type of training

Training Department

Other Department(s)

Cross-department request for technical skills or knowledge training

Use organizational resources as subject matter experts from many areas and develop the content. Train each area to perform its part, and then make each area aware of the entire process.

Provide specific content information and needs that should be addressed for your area.  Review the final product/approach so your department’s needs are met.

Core skill (everyone in the organization needs the skill or knowledge at some level)

Make sure you provide the same message to all parts of the organization.

Provide department specific examples and context to make the training more effective.

Interaction-based training

Use scenarios provided by other parts of the organization and fit them into the job aid.

Provide scenarios and situations that apply to the interaction skill.

Highly-technical function or specific skill training

Organize content into job aids and facilitate classroom training as needed with a subject matter expert from other department. 

Teach the technical part of the class with the training department providing the facilitation.

Management or leadership training

Understand the outcome of the skills needed and use a facilitation discovery-learning technique

Provide the situations that apply to the leadership skill that people in the organization are struggling with and make sure the conversation is getting at the real issues.

Communication of information that doesn’t require a change of skill, but is new information or knowledge. 

Get content or technical detail from other department, and use the information to assist with constructing a communication piece or a job aid. 

Provide the technical detail.

Sometimes the training department will be unable to assist in developing training. Make sure you have templates available for job aids, communication and facilitator guides ready for others to use. You should also set aside time to work together to

o   Describe the objective of the training,

o   Understand why employees are not able to perform the task as assigned and

o   Discuss the basic structure of training.

While involvement by other departments is important, be sure to have a facilitator who is not the subject-matter expert. Consider a time when you’ve met someone who is an expert on something—nuclear fission, baseball cards, fishing—and how the conversation likely went beyond territory you understood. Well-meaning, marginally-crazy subject-matter experts skip context and the basics in favor of the interesting, cool or difficult parts of their subject.

Allow the expert to develop the training, but facilitate the session. Lead the witness, so to speak. Be sure you’re helping to:

o   Provide context for the task (why is the organization doing this and what is my part in it?),

o   Recap conversations and provide transitions,

o   Re-state questions and answers for clarity during a discussion and

o   Cut off conversations that become too technical or off-topic.

Ken also wrote a series for manager skills. What other business skills do you want to know more about? Tell us in the comments!

Ken Burnett is vice president/director of training and business development for Bank of American Fork. He is responsible for training more than 300 employees on a variety of topics, including coaching and feedback for dozens of senior managers within the organization.              

Open-Book Management and the Income Statement Nov 13, 2014, 9:24 am By Heidi Carmack Pfaffroth

Guest post by Richard H. Tyson, CEObuilder

Guest blogger Tyson is starting a series here about open book management. Make sure you check back for additional articles!

In my last article, I shared the merits of adopting open-book management. As discussed there, each business should identify and regularly display key performance indicators (KPIs) to fully engage employees in creating desired outcomes.

While some of these will be unique to each business, there are a handful of KPIs that should be employed in every for-profit enterprise.  Among those are a few critical metrics from the income statement. They include:

• Revenue (sales)

• Cost of goods sold (COGS or cost of sales)

• Gross profit

• Operating expenses (general and administrative expenses)

• Net profit (earnings before interest and taxes/EBIT or earnings before interest, taxes, depreciation and amortization/EBITDA)

Each of these income-statement metrics focus on aspects of running a business profitably. Notice that I have not included any measure of earnings after interest, taxes, depreciation and amortization. Why? Because these items have nothing to do with the operations of the business. Interest expense is a function of how the business is financed, taxes don’t have anything to do with how well the company is run, and depreciation and amortization are accounting conventions that have nothing to do with operations.

Also notice that each of the KPIs mentioned is a lagging indicator; that is, it is the result of other factors that create that outcome. These other factors are also often measureable, and are known as leading indicators. With lagging indicators, open-book management raises several essential questions:

• How can we increase revenue?

• How can we reduce COGS?

• How can we increase gross profit? (An answer to the revenue and COGS questions will provide the answer.)

• How can we reduce operating expenses?

• How can we increase net profit? (As the ultimate lagging indicator on the income statement, answers to the preceding questions will create a favorable answer here.)

As management and frontline employees discuss these questions, they should recognize that not all income-statement dollars are created equal. An additional sales dollar ($1) is decreased by the COGS associated with it (let’s say $0.50) and by the operating expenses that might correspondingly be costed against it (let’s say $0.40). In this example, an additional sales dollar contributes only 10 cents to the bottom line ($1-($0.50 + $0.40)).

If, however, you discover cost reductions of $1 (in either COGS or operating expenses), the entire dollar goes to the bottom line. In other words, to get the same impact of a dollar of cost savings, you would have to sell $10. The investment in cost savings literally increases profitability faster than does increasing sales!

That said, revenue should not be ignored. It’s often a first instinct to reduce price to increase sales. While this might bring in new sales, it must be recognized that reducing price without an equivalent reduction in COGS hurts gross profit unless the volume of sales increases significantly.

Price reduction is an easy answer, but the better solution to revenue enhancement is generally to improve product or service quality (hopefully without an increase in COGS), thereby enhancing the ability to sell the value proposition inherent in the product offering.

The answers are not always clear cut, but one thing is clear: before any of these KPIs can be optimized, employees need to better understand the existing metrics. This can be done through the use of dashboards that measure and display leading indicators that drive financial outcomes. Some executives will choose to share metrics expressed in dollars, while others will opt for ratios, percentages, ratings or scales. Whatever the measure used, executives need to start engaging their team in the process of improving financial outcomes. Newcomers to open-book management often find that their income statement is a very good place to start.

Richard Tyson is the founder, principal owner and president of CEObuilder, which provides forums for consulting and coaching to executives in small businesses. For 22 years, CEObuilder has successfully brought about an outstanding financial return for CEO and executive clients through providing leading-edge content in the areas of strategizing, team-building, problem-solving and managing for results, as well as the use of proprietary learning and coaching models.

Local strides in protecting seniors and caregivers sparking national push Nov 11, 2014, 9:47 am By Heidi Carmack Pfaffroth

Today, on Veteran’s Day, we’re thinking of the many Utah seniors who are also veterans. Up to $1 million a day is stolen from Utah seniors (see here). Recently Bank of American Fork received the 2014 American Bankers Association Community Commitment Award for Protecting Older Americans, a national award with only one recipient. Bank of American Fork has a unique passion and five-part initiative designed to help support caregivers and protect seniors from fraud. Behind the initiative are employees that are passionate about helping the seniors and caregivers in the communities where they live and work.

Tracey Larson is one of those employees. Larson, a special projects manager at Bank of American Fork, is the head of the bank’s age-friendly initiative. Her passion stems from being a daughter of senior parents.

“There was a shift for me that caused me to become really passionate about supporting age-friendly banking,” said Larson. “It was when I started to hear the stories. I remember my first meeting on a committee that included hearing first-hand stories of elder and vulnerable adult abuse. I cried.”

Besides her passion for making banking and finance safe for seniors and their caregivers, Larson has the know-how and detailed eye that make it natural for her to move the initiative from words on paper to action in the community.

For example, Bank of American Fork has an age-friendly champion at each branch who receives extra training on how to spot fraud or a stressed caregiver. Although all Bank of American Fork employees are trained to look for and report suspected fraud, the training for age-friendly champions is more comprehensive and goes far beyond what regulators require.

Because of employees like Tracey Larson, Bank of American Fork is making strides in helping to prevent elder financial abuse. Because of the bank’s innovations like account tools to help protect seniors and education about how to protect loved ones, awareness of this widespread problem is growing. To move prevention beyond Bank of American Fork customers, the bank is collaborating with other organizations and financial institutions to make offerings like this nationwide.

If you are a senior who needs, or may soon need, help with your finances or a caregiver of a loved one, you are not alone. Visit blog.bankaf.com/seniors. Ask your banker about what resources are available to you.

Tracey Larson, vice president and special projects manager at Bank of American Fork, accepted the 2014 American Bankers Association Community Commitment Award for Protecting Older Americans, from John Ikard, American Bankers Association chairman, on behalf of Bank of American Fork in Dallas on October 21. Larson is also the financial representative for the Governor’s Commission on Aging and is also a member of Provo’s Elderly and Vulnerable Adult Coalition.

Help Utah children by donating stuffed animals through December 16 Nov 04, 2014, 5:00 am By Heidi Carmack Pfaffroth

Project Teddy Bear in its 15th year

The little boy was so traumatized by neglect and abuse that he spoke to his therapist from inside a cardboard box for two years. Inside, he clung to his trusted teddy bear—the only one he felt comfortable with enough to have inside with him. This child—and thousands of others like him—has benefitted from your donations to Bank of American Fork’s Project Teddy Bear. Each holiday season, we collect new and clean, gently used stuffed animals to give to children at family support centers across Utah. Many of the children are victims of abuse, neglect, poverty or addiction. Some have been taken from their homes into state custody during the night; others have been moved from one foster home to another; yet others have experienced the violent loss of a loved one.

When these children, and perhaps all children, can hug and hold their own teddy bear, it brings comfort and a feeling of safety.

You can help. Project Teddy Bear is an opportunity for you to join with the communities in Davis, Salt Lake and Utah counties, and donate teddy bears and other stuffed animals.  Starting this month, all Bank of American Fork branches will be accepting donations of new or clean and gently used stuffed animals through December 16.

VISA® gift cards Oct 30, 2014, 8:47 am By Heidi Carmack Pfaffroth

Looking for the perfect gift for employees, those hard-to-please relatives and friends?

We have the solution: a VISA® Gift card. Bank of American Fork’s VISA® Gift cards allow recipients to decide how they want to spend their money, saving you the hassle of shopping for all the people on your list. They’re the perfect gift for any occasion, including those coming up—holidays and end-of-the-year employee rewards. To purchase a gift card or to find out more about the fees that apply when you purchase a gift card, please visit our website or your nearest branch.

VISA® and the name Visa are federally registered trademarks of Visa.

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