Choosing a business bank account is a decision that needs time and attention. It’s not just as simple as choosing a bank that you know and setting up an account for your business. The wrong choice can have a negative impact on your operations and cause unnecessary friction for you. And switching providers down the line isn’t always possible.
Before you rush out and start comparing business bank accounts, here are a few easy tips you can use to make sure you’re making the right choice.
Compare Fees Before You Sign Up
Monthly fees are only part of the cost of a business bank account, and accounts that look cheap at first glance can carry charges for transactions such as deposits or foreign payments, and these will add up quickly.
Take your time and read the full fee schedule rather than just the headline monthly cost, as this will give you a clearer picture of what an account will actually cost once real usage is factored in.
Then compare a few different providers side by side based on typical monthly activity to reveal differences that make them suitable or unsuitable for your business.
Look for a Business Account with Low Transaction Limits
Moving on from the point above, you need to look for accounts’ transaction fees and caps. There could be a cap on the number of free transactions included each month, with charges kicking in once that limit is exceeded. This can catch many out, especially new businesses that might not realise they’ll exceed the free limit or faster-growing businesses that increase in transaction volume each month. Pay attention and make sure the limit or the fees once you hit that limit are manageable for what you expect, as you need a business account with limits that match the actual volume of transactions you get or expect to get.
Check Integration With Your Accounting Software
An account that doesn’t connect properly with accounting software like Xero or QuickBooks creates extra manual work every time transactions need to be reconciled. Check for direct integration with whatever software you’re currently using or are planning to use to change to. This will save you so much time on bookkeeping and reduces the chance of errors creeping in from manual entry. This is particularly useful come tax time when you’ll have all the figures you need in front of you without searching for them.
Consider If You Need Multi-Currency Support
This is really important if you’re expecting to deal with suppliers or customers overseas. You can lose a significant amount to conversion fees or unfavourable exchange rates if the account you choose doesn’t support multi-currency transactions properly. Check if an account offers competitive currency conversion or the ability to hold and pay in multiple currencies directly, as this avoids the extra cost and hassle of routing international payments through a separate provider. Even if you only deal with international payments occasionally, it’s always a good idea to know how this impacts you before you commit to opening an account.
