From the very first moment that you launch your business, it’s important to keep your financial affairs in order. Keeping accurate records and having a sensible accounts solution in place are just two aspects of this, but ensuring that you have a business bank account that meets your needs is just as critical.
Whether you are a one-man-band operating as a sole trader, or you are about to launch a major brand with outside investment, getting the right bank account will help you take those first crucial
steps.
As your business grows, the relationship you have with your bank will become increasingly important, so choosing carefully at the outset will pay dividends over the long term.
All of the well-known banks offer a period of free banking to new businesses. It’s important to be clear on the difference between being a new business and being a new customer though, as these deals are often available only to startups, and not to existing businesses that are simply switching banks.
The length of the free banking period offered varies from bank to bank, so check carefully, as this is one of the most useful incentives offered.
Other features offered by banks to secure new custom include free access to business or legal advice, fee-free overdraft facilities and interest on credit balances. It’s easy to be tempted by these additional incentives, but be realistic, and ask yourself whether you will really use them, and how valuable they really are for you, before you let them sway your final decision.
The initial free banking period might be the headline attraction, but it pays to look further down the line, and assess what charges you’ll incur once that initial period is over. Some banks charge a fixed monthly fee, whilst others apply fees based on activity types and volumes.
Monthly account fees
If you conduct all payments and receipts via online transfer, your monthly account fees are likely to be lower than if you run a cash-based business, where you need to deposit takings into a high street bank on a regular basis.
Other features that you might need to consider include access to a business credit card, an overdraft facility, a business savings account, card processing facilities or an online merchant account. Discuss all of these with your shortlist of banks, to ensure that they can meet your needs.
Once you’ve assessed your requirements fully, and mapped them against the bank account products on offer, make a shortlist of suitable banks and fix appointments with several from the list. Go prepared to answer questions about your business, and take a business plan and some financial information with you.
That will demonstrate that you’re serious about your business, and will help explain why you need certain account features, like an overdraft or credit card. Find out from each bank whether you will be assigned a dedicated contact point, who will stay with you as your business develops.
Trust your instincts when it comes to making a decision, and reject any bank where the representative you meet doesn’t seem to understand your business or appears disinterested. You’re looking to open a relationship and not just a bank account, so make sure you choose an organisation you feel comfortable with.
When you’ve whittled your choices down, check online for customer reviews, to see whether your shortlisted bank has a strong reputation in the SME sector.
With just a little bit of research and some time spent discussing your requirements, it should be possible to find the ideal bank account for you, and to start a banking relationship that will grow with you, as you build your business.
Learn more about keeping good financial records for your business.