Tina RothWhether you are starting out on a new venture, or looking for better service, ensuring you have the best business bank account to suit your financial needs is essential.
Unlike personal banking, business accounts vary a surprising amount in the services they offer, the level of assistance they can give, and in their fees and charges. Different accounts work for different businesses.
For this reason, it’s really important to invest plenty of time in selecting the right account for your business now; this will reap many rewards later on.
1. How to Start
You’ll already be aware that there are plenty of business bank accounts on offer, but before you begin to sift through the literature available, spend some time considering what you need most from your account. Clearly, you need your bank to handle your day to day transactions efficiently, but you will also need a bank suited to your business’s individual needs.If you are going to require business credit cards, commercial lending, and cash management services, find a bank that can handle it all.
- You might desire a bank that will offer a great degree of support to your fledgling business through a named, experienced representative
- Perhaps you’ll need a bank that is experienced in international trade finance
- Maybe you expect to need to borrow money at some point so you need to look for more relaxed lending criteria
These are examples of services that are not necessarily to be enjoyed with every bank, so you need to be clear on how you would like your chosen bank to work for you in return for their fees.
Compiling a list of criteria at this stage will keep you focused and help you resist dazzling introductory offers for a bank that may be unsuitable for your needs long term.
2. Narrow the Field
Now that your mind is clearer, you can begin to rule certain banks in and out. As well as looking at their specialist services, look at which banks have a local and convenient branch, as while business banking can be done online, most business owners will still need to visit their bank fairly often, particularly if they are accepting check and cash payments.
Online banking facilities still vary widely in their ease of use, so it’s sensible to watch a demo of how it works for each bank to inform your choice.
3. Use Word of Mouth
Once you have a list of possibilities, it’s probably worth doing your homework on each bank. Online searches for customer reviews can be enlightening. You’ll probably find that every bank has at least one disgruntled customer online, so try to detect volumes of complaints and common themes to get an idea of how they perform for their customers.
It’s important to remember that you’ll have a lot more face to face contact with your local branch than you are accustomed to from personal banking, so it’s pertinent to network with other local business owners and get their opinions on local banking options, too.
4. Closely Examine Fees and Charges
Nearly all business bank accounts will come with an introductory period where fees and charges are waived. Some will advertise particularly attractive opening offers, but try not to let yourself be influenced by these offers, especially when you are less keen on the services they offer.
Look further ahead at the charges after the introductory period and cost out what you think you’ll be paying per month with each bank. Some banks charge a higher monthly fee with a more generous number of free transactions; others charge no regular fee but charge higher amounts for every transaction.
Although the cost of banking is important, the cheapest banking is not necessarily the best option. Weigh up whether better support from a particular bank may be worth paying more for.
5. Visit Your Options
It’s an absolute must to meet with a representative of each shortlisted bank before you make any firm decisions. You’ll soon get a sense of whether a bank is the right or wrong choice for you this way. As you’ll need a positive relationship with your bank from your first days of trading, you should choose a bank that you feel will listen and support you as your business evolves. Gut instinct is important here.
It is wise to draw up a list of identical questions based on your needs to ask all banks on your shortlist. Rather than purely listening to the generic sales points they may give all potential customers, you can then compare their different answers to pinpoint which one will serve you best personally.
You should now be armed with enough knowledge to make a wise decision.
6. Revisit Your Options Regularly
While you will have made a sound financial decision for the next year or so of your business’s life, it is important to remember that times change, so what might be the best option now may not be in a couple of years.
Your business will evolve, perhaps in unpredicted directions, and so will the business services of your bank. Their banking rates will almost certainly change, too. For these reasons, make a note on your calendar to revise your decision periodically and switch banks if necessary, so that you can be always sure your bank is working well for you.
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