Choosing the right business bank account is an important decision. Cash flow is the lifeblood of your business, after all - so who will you trust to provide the right account to keep it flowing?
With so many options to choose from, the process of searching for the right business bank account can be stressful and time-consuming. We've put together this handy guide to help you understand what's important when it comes to choosing the best bank account for your firm.
Consider your business needs
First off: what's important to you? Consider what you're looking for in a business bank account.
Some accounts will offer lower monthly account fees - or wipe these altogether - which could save you hundreds of pounds. But they might replace the fees with charges on transfers - so think about what these will add up to, and look for the right balance for your business.
The right bank account can save you a great deal of hassle in your day-to-day admin. Some banks will even provide business support and advice when you need it. It's about checking the details to see how they apply to you.
Take the time to consider your needs both in the short term and the long term, and then compare the business bank accounts on offer.
Switching your business bank account
In your search, you'll come across banks that offer no-fee periods, or even free cash, for switchers or new start-ups. But beware - these introductory offers will eventually run out, and you may be left with a bank account that overcharges you or doesn't fit your requirements.
If this is the case, you might end up needing to switch again. Fortunately, most providers now make it easy for businesses to switch current accounts, so you'll be able to move things across relatively quickly (most banks will commit to seven days). You can be set up with your new bank in no time at all.
Equally, while it's okay to take advantage of introductory deals from time to time, being a constant switcher might leave you without the benefits that come from being a loyal, long-term customer with one bank. Again, it's about finding the right solution for you and your business.
Business bank account fees
Remember, most business bank accounts come with monthly account fees, which are often accompanied by charges for certain transactions.
This means you might get charged a small fee for paying in cash and cheques, transferring or withdrawing money, using an overdraft or making international payments.
To begin with, think about the type of transactions and services your business will be likely to use. For example, if you think your business will deal with a lot of cash, then consider looking at an account that charges a lower percentage - or nothing at all - for paying in cash.
Some banks offer fee-free periods for new accounts. If you're looking for a start-up business bank account, this can be a good option to allow your business to get on its feet. If you do choose this route, bear in mind that you will be charged once the fee-free period has finished. Plan in advance so that you don't get caught out with high charges.
What about online banking?
Fees are often higher when business banking tasks are done in-branch, so it's a good idea to look into online banking. In some instances this can save you money as well as time.
Many online banks offer free business accounts with no monthly fee. They will tend to charge more for regular transactions and transfers, but depending on your business model this might be better value than paying a regular monthly amount.
There are of course other things to consider with online bank accounts - the most obvious being their lack of physical presence, and no personal relationship with staff. So don't just compare account fees - there's more to it than that.
Copyright 2019. Article was made possible by John Ellmore, www.knowyourmoney.co.uk