Wobbling Over a Banking Decision?
We'll Show You How to Keep Your Balance
Deciding on the right business bank account for you isn't as simple as it sounds, and the path of least resistance may not always be the wisest.
You've already had to make some tough decisions setting up your business. You've opted for laser Gatlings on your fortress battlements instead of the standard lava cannons, and you've beefed up the quarantine protocols in your cloning lab in preparation for that shipment of alien DNA that's coming in next week. You've learned it's the little details that matter most, so don't jump for the easy solution when it comes to picking the best business bank account.
Small business owners often wonder if they even need a dedicated business bank account. Sole Traders aren't legally required to have one but Limited Companies are distinct legal entities and their finances must be kept separate. Any new business needs to keep its financial records transparent, professional and easily maintained, so a dedicated business account will save a lot of headaches. As with personal accounts, some will suit you better than others, yet many people end up sticking with the same bank that provides their personal banking - and that so-called convenience could have hidden costs.
Remember that your bank is there to serve you. Don't be afraid to shop around regularly to see what's on offer as your needs change. The best small business bank account for you last year may be too limited for you today, so keep your eyes open. It may seem like a hassle, it's a lot better than struggling along with an account that no longer fits your business. The wrong account could be affecting your livelihood or employees, and you can usually change it pretty simply unless you've got loans or other obligations that prevent switching.
The basic things to look for are:
As with personal banking, there are often incentives to keep existing customers or attract new ones, so always ask what’s available. For instance, most banks offer an initial period of free banking (typically a year or two). Many may try to dazzle you with “free advice” or videos and software to get you to sign up. Personalised one-to-one help is always valuable, but if all they're offering is general-purpose “business advice” then you can probably get better information elsewhere. Bigger things to consider are the fees the bank will charge once that free banking period is over. For example, some banks charge a flat monthly account fee for anything you want to do, while others charge for individual transactions like paying cheques in.
When you start comparing business bank accounts, think about how you’ll be using them. Will you be the only person who runs the account or will additional users be making transactions? As a general rule, the more you can do online without going into a branch, the fewer charges you'll pay.
Once you've looked at the basics, it's time to refine your selection:
Even if you like the first bank you find, still make appointments to see others for an informed comparison. Understanding what you don’t want is as important as understanding what you do - and it'll make all the difference when it comes to upgrading those burned-out laser Gatlings in a few years. Keep your wits about you, and listen out for more Voices From the RIFT...