Whether you are an independent or limited company contractor, choosing a bank to handle your hard-earned money shouldn’t be a decision taken lightly. As your business continues to grow and your profits increase, it will become increasingly important to keep your business finances and your personal expenditure separate. Opening a business bank account is a smart decision that will help you manage your finances, process tax returns and deduct business expenses more easily.
There are various factors that should be considered when selecting the business banking option that’s right for you. In this post, we share our golden rules for finding the right business bank option for you.
Shop around for business banking
Comparison websites aren’t just useful for finding the right car insurance, home insurance or energy product. There are numerous options out there so shop around to find the one most suitable for your business. As you’re certain to discover, not all business bank accounts have been created equal. Some provide ‘limited time only’ offers to attract new business customers, whilst others levy an account fee which is payable monthly or quarterly.
Shopping around for your business bank account will ensure you are aware of the pros and cons of each product before opening an account with your chosen provider. When reviewing business banking products pay particular attention to the fees they charge. As well as monthly fees, you will have to pay direct charges on some transactions. These transactions may include paying in cash, depositing cheques, transferring funds or withdrawing.
Selected accounts provide introductory periods of free transactions, but don’t be enticed without looking at the charges that are applicable when this deal comes to an end.
Remember, it’s not all about the fees
As an independent or limited company contractor you will want to keep banking fees as low as possible, it is important to understand that some banking extras are worth paying for. This article from the Telegraph highlights a very important point that will come in handy when searching for a business bank account:
“It’s vital that you engage with a bank that can offer you the support you need. It is useful if you can have a named contact in a bank. This way you can speak to your contact whenever you have an issue or a query.”
Take your search offline
The internet is the perfect research tool, especially when it comes to reading accounts of other business customers’ banking experiences. However, taking your search offline is essential to finding the right banking partner for you. After shortlisting your top three banks, make appointments to speak to one of their representatives in person.
These appointments should reveal more about the features on offer with the business banking product in question. Meeting in person will also give the bank an opportunity to delve deeper into your business requirements. It’s possible they may be able to offer you a more enticing or suitable product.
An important part of managing your finances as a contractor or small business is your choice of accountant. Make sure you have the formula for success by outsourcing your accounting to a trusted partner like us.