Although business bank accounts aren’t a legal requirement for start-ups, you’ll find it difficult to manage your affairs without one. Not all are the same however, so it’s within your best interests to find a deal most suitable for your business model.
Banks offer various sweeteners to attract you to their branch, although there are also charges (and sometimes hidden charges) to contend with too. To ensure you don’t pay over the odds, it’s perhaps best to speak to your accountant before a decision is made.
Efficient saving is the key to a successful company, no matter how big or small. To help you achieve this, here are some ways to save money on your business bank account.
Business Bank Accounts
Although not compulsory, business bank accounts are strongly advised for starting a new company. They present a professional appearance and help keep your personal and business matters separate – this is primarily useful when dealing with the HMRC.
The best advice is to use comparison websites to find the best deal for your personal circumstances, although remember to read the small print and enquire about any hidden charges. Here are some other things to look out for:
- Free day-to-day banking is usually offered for start-ups over a limited time, often set between 12 to 24 months. Unlimited transactions can be made without a service fee, although you’ll automatically be transferred to one of their set tariffs once expired.
- Some banks offer reduced monthly fees depending on how much you deposit into the account – the more you put in, the less you’ll have to pay in charges. If you’re expecting large regular payments, a deal of this nature will lower your outgoings.
- Depending on the type of business, interest rates could be a deciding factor. Accountancy advice is recommended when choosing between fixed and variable APR rates due to environmental market conditions.
- Look out for ATM withdrawal fees. If you do need to make cash withdrawals, take out larger cash sums on a less frequent basis to avoid regular charges.
- There are usually increased penalties for using cheques and they can cause unnecessary havoc if declined. Automated online payments, both sending and receiving, are far easier and an expected facility in the modern business world.
- For SMEs or start-ups, it’s likely you’ll need to use an overdraft at some point. If so, shop around to see which lenders offer the most lenient overdraft facility and lowest APR rate. Do not exceed your overdraft limit as the charges can really mount up.
- Watch out for headline offers that can be misleading. Although the initial benefits could be tempting, you may be tied down to an expensive long-term contract with an awkward get-out clause.
When it comes to your business bank account, the best advice is to shop around using price comparison websites and seek advice from your accountant if necessary. Remember your own personal bank may not offer the best business deal and initial bonus offers could be costly in the long run.
Efficient spending practice is also vital in reducing business costs. Evaluate all your outgoings and assess which areas can be tightened up. If you need help doing so, we’re happy to share our expertise.
To have a chat and get some advice, get in touch.
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