Choosing an account when starting a new business is a crucial step. You need to select the account that fits your business requirements. If you own a small business or planning a start-up, this article will help you decide what to look for in a business account.
As a business owner, looking into the value of your money is essential. Different business sizes have different requirements.
What should you look for in a business account as a small business owner?
As a small business owner, you should look for a business current account that is easily accessible, affordable and offers introductory services. Some of the things that you must look for before choosing your business account are listed and elaborated below:
Fee and Charges:
You need to know that it is very rare, almost unlikely, to find a free bank account just like a personal bank account. Though an account that charges you less for its services is quiet likely and you can compare the headline charges of different services:
- Free Limited-time services: Some banks offer you a limited-time free banking service. Look for the deadline and limit of the free banking and then choose accordingly.
- Service fees payment schedule: Are the charges monthly or annually.
- Transaction Charges: If you need to carry out many transactions, transaction charges are of utmost importance.
- International transactions: If you deal internationally, then you’ll need to see if the account offers international transactions, the transfer limit and charges.
Look for different introductory services offered by banks for your start-ups or small business.
- If you run a virtual business, look for a bank that offers you an online business bank account. It will help you get out of paying monthly fees and penalty charges for making too many transactions.
- A bank account that offers unlimited free transactions with a minimal cash deposit fee.
- When opening an account, look for a bank that offers no minimum deposit requirements.
- If you have to link to another small business account, look for a bank that offers free overdraft protection.
- Look for banking features like tax calculating tools, categorization of the expenses and VAT returns, etc.
- A bank that offers live customer support to clear your queries at any time.
Integration with accounting software:
Accounts and finances are other crucial aspects of your business. Choose a business bank account that may integrate with:
- Different accounting software like Xero.
- Look for an account that integrates with QuickBooks to keep an accurate record of your cashflows.
- Other accounting software includes QuickBooks online, FreshBooks and wave, etc.
If you have an online business and are in the E-commerce industry, you need to look for a banking account that provides you with e-commerce solutions like PayPal and Expensify, etc. Further, look if they have online banking facilities and mobile apps. It will help you in:
- Paying bills online.
- Track your business account.
- Transfer of funds and other business transactions.
- Deposit cheques and make transactions with the mobile app.
Why do you need a business bank account for your small business/start-up?
Apart from having financial protection for your business, a business bank account has many other perks. You can separate your expenditures and manage the costs. It ensures an organized and systemized handling of your business cashflows and helps in keeping track of your monetary funds. Further, you can enjoy some business tax deductions and calculate your tax liabilities by separating your business bank account from your personal bank account.
Some banks also offer you interest on your balance. From the services provided in many banks, you can set up accounts for your employees and monitor them using the banks’ online services.