When starting a company, a business bank account is one of the things you really do not want to forget. It is simply impossible for a business to survive or thrive without one because it is the focal point of all your finances and the channel through which your business money flows in and out of the business. Business bank accounts are used for depositing payments, paying staff and suppliers, petty cash draw outs and for other financial transactions that are fundamental for the running of the business.
As a startup, the best you can do is ensure that you separate your personal finances, from the business, regardless of the type of business you have decided to start. This makes it all much simpler for you to calculate taxes and it also gives your business more credibility making it possible for you to get advice, support and even financing. But before opening your business bank accounts, there are a few things that you should consider so that you are able to get the best account for your startup company.
Bank facilities
When comparing business bank account offers from different banks, remember to check facilities such as withdrawals, deposits, cheque payments, direct debits and credits, company debt and credit cards, statements and balance enquiries. They are all important for your business account and what you should strive to know is the terms and conditions of each and how suitable the terms are for your kind of business.
Borrowing
At some point in business, you might need financial assistance. When opening your account, it helps to find out whether borrowing is possible and the terms surrounding the type of account that you choose. Find out more about loan and overdraft facilities the bank can offer you, asset finance, commercial mortgage and invoice and factoring discounting depending on your financial needs.
Other features that you should consider when opening your business bank account include merchant services if at all you want to accept debit and credit payments from your customers. Insurance is also offered by larger banks to cover loan repayment, health and business interruption so check whether your bank has such offer or introductory offers that you can take advantage of as you get your business on its feet. If you are lucky enough, you might find a bank that offers free banking for a year or more for all startups. It is definitely an offer, you should consider to keep your costs minimal in the first months of business.
Mistakes to avoid
When opening business bank accounts for your startup, there are a few mistakes that you should avoid by all means possible. These include:
- Choosing the wrong bank for your business
- Unplanned cheque signing authorities
- Missing or incorrect information when setting up the account
- Wrong check ordering and
- Choosing minimum monthly balances that are unreasonable for your startup
These are all mistakes that can get costly for your business. Business account opening seems like a simple process that anyone can handle by simply filling the necessary forms. You should make sure that you go over all important details regarding the account you are about to open so you are sure that your banking partner will come through for your business when you need it the most. You should actually take time to compare between the different banks and offers they have for startup accounts so you can settle for the financial institution you feel will work for the business financial needs you have currently or might have in the future. When you know what features to check, it becomes easy for you to make a good choice with your partner and the type of account for your business.
How to pick a business account?
It helps to be very precise with how you open your business bank account. If you are not sure of how to approach the process and be successful you can use business formation services that are now readily available to startups. This blog post by Company Formations 24.7, outlines all the main business bank accounts across the UK, giving a detailed breakdown of the different features across the app and online banking platforms.