Opening a business bank account is a big decision that can have a significant impact on the everyday running of your business. The right account can help save you time and avoid surprise fees, but how do you know which one to go for?
The banking landscape is vast, with endless providers who each offer different options and tailor services to suit different industries. To ensure you can successfully finetune your options and pick a bank account that ticks the boxes, we have shared four ways that you can prepare when you’re ready to open a new account.
Establish Your Banking Needs
Different banks offer different services, so opening an account that suits your business needs can save you a lot of wasted time and fees down the road.
Many businesses start with a business checking account, but other options include savings accounts and merchant accounts for payment processing. For businesses that plan to accept payments, it’s worth considering getting a credit card machine as part of your package; this allows you to easily process payments and manage cash flow. It is important to never assume that a new bank account will include a business credit card or access to a line of credit; always look into different package options to ensure they can provide what you need.
Certain banks cater specifically to different industries, allowing businesses to open bank accounts with features that are tailored to the needs of their business. This is also great when needing to integrate a bank account with existing software, such as an accountant who uses bookkeeping software.
Understand The Bank Fees
Research has revealed that small to medium businesses in the UK are paying over £3,700 every year in hidden charges or fees, so it’s worth making sure this is not the case for your business!
Fees vary significantly between banks, so understanding the costs associated with each can help you find the best solution for your business. The key ones to look out for include transaction fees on each deposit, maintenance fees every month, or international transaction fees.
Many banks waive fees if you meet requirements, so looking for criteria that your business meets can save you money in the long run. For example, if you maintain a minimum balance or set up direct debits for your bills, then the bank will agree to cut out the additional charges.
Prepare Business Documentation
Once you have decided that you are ready to open a new business bank account, make sure you have all the documents needed on hand. The most common requirements are an employer identification number, proof of your business address, the personal ID of the person opening the account, estimated annual turnover, any necessary licences, and your Companies House registration number where appropriate.
All banks will require these documents to prove that your business is legitimate and matches up with what you have said. Although there will be some variation from bank to bank, having the appropriate information and documentation on hand will speed up the process when you have selected the bank you wish to open an account with.
Look Out For Opening Bonuses
As with personal bank accounts, banks are continually offering new promotions to businesses in an aim to draw in new customers. These bonuses may include an initial cash sum, discounted services for a certain number of months, or waived fees if you meet a criterion.
Although these promotions can often be great deals, it is important not to get drawn in too fast. Make sure to look further than the incentives and consider whether that provider is going to offer the solution your business needs. The long-term value of the bank account goes far beyond the initial bonus, so make sure to read the fine print and assess whether the account is going to be a cost-effective decision.
Long-Term Success For Your Business Finances
Opening a business bank account requires more consideration than initially meets the eye. Being a key factor in your financial foundations, the bank you choose is bound to impact the future of your business.
Having a thorough understanding of your business needs and being able to compare the different account options to make an informed decision will help you benefit from the innovative features and avoid those nasty hidden fees.
By following the four simple steps above, you will be well-equipped to pick the bank that best meets the everyday needs of your business and suits your financial requirements.
