One of the toughest task for small businesses can be to choose and open a bank account that can help it operate effortlessly, and effectively. Although new small business owners might not take opening the bank account, or banking for small business critical for operational effectiveness and transparency.
Therefore, for all new and current small business owners who wish to concentrate on business growth, the following tips might serve as precious gems.
- Opening business account highlights small business owner’s professionalism to customers and suppliers. It is a requirement of local trade bodies and tax authorities to have a business account for initial registration.
- With a business account, you will be able to do effective bookkeeping by managing cash flows, paying salaries, deduct taxes, receive tax rebates, and receive revenue from customers.
- A business account usually comes with its own credit card for business expenses that help distinguish personal from business expenses.
- A business account can provide overdraft and credit lines facilities when a small business require trade finance to run operational and working capital on a routine basis.
Things to consider before opening a small business account:
- Always open small business accounts in known banks and the nearest branch to your business address.
- Review small business features such as credit card, checking account services and overdraft facilities before signing.
- Understand the interest rates charged on overdraft and debt payments. The lower the better.
- Understand services and product fee schedules before applying. Higher credit card and debt fees can increase business debt.
- Inquire if the bank can provide the federal Small Business Administration (SBA) loans.
- Inquire if the bank provides digital banking and electronic funds transfer facilities to small business owners.
- Assess the risks of investing excess profits in profit bearing accounts, and their legal terms before engaging in them.
- Lastly, assess if the bank provides online payment channels, wire transfers and external benefits and facilities such as discounts on fuel, hotel and travel expenses.
- Above all, get to know your personal banking representatives.
Understanding the banking structure can be hard, but assessing the benefits can help differentiate expenses, and make operations easier.