Having a separate bank account for your business is a great idea that can have a range of benefits. It makes things easier when you file taxes and apply for business loans. Nowadays, industry experts recommend that businesses have up to three separate business bank accounts.
However, as is the case with personal bank accounts, there are quite a few things you need to consider before opening a bank account for your business. These include banking features, transaction caps, interest rates, payroll support, accessibility, the type of account, and fund transfer options.
This post will examine each of the factors mentioned above in detail to help you understand the important roles they play when it comes to your business bank account.
1. Banking Features
Your business is bound to have a range of financial requirements, so opening a bank account with a variety of features is important. For example, it would be a good idea to open an account with a bank that does not charge exorbitant overhead monthly fees.
Furthermore, given the rapid pace that the digital world is evolving, you should ensure that your business bank account has flexible digital banking options for making and receiving online payments. Additionally, you can look for other features depending on the specific needs of your business.
2. Transaction Caps
Irrespective of your industry, the unpredictability that comes with doing business means that it’s always wise to have liquid cash ready on hand. Otherwise, you might find yourself needing to sign multiple cheques in a day to close a business deal.
Before opening an account, check with the bank to understand their transaction policies. Make sure that the transaction caps on your account are not restrictive. It would be best to open business accounts with a bank that provides flexible transaction caps.
3. Keep a Close Eye on Interest Rates
It’s only natural for you to want to see your hard-earned business revenue grow, so you should be on the lookout for banks that offer good interest rates on your savings. It’s important to compare the interest rates offered by various banks before making a decision.
Yes, a higher interest rate will help your money grow. However, it’s imperative not to lose sight of the other factors by pursuing a business bank account with good rates of return on your investment.
4. Payroll Support
Every business has employees who need to be paid on a weekly or monthly basis, so you’ll need a business bank account that offers payroll support and integration as an add-on. This feature can be super helpful when you pay your employees.
This factor becomes especially important if you run a small or medium-sized business. You’ll find that opening a business bank account with payroll support brings additional benefits, such as access to employee payroll history, payroll preview, and efficient data storage.
While opening a business bank account, you should assume that you’ll be paying the branch or ATM multiple visits a week. As a result, you should consider how accessible the bank and its ATMs are.
For example, some banks don’t have a vast network of ATMs. You can start by taking stock of the banks with branches in your area.
6. Type of Account
Just like a personal account, business bank accounts come in different types. Business checking accounts allow you to handle basic financial operations, such as receiving payments, transferring funds to business partners, and withdrawing money.
On the other hand, business savings accounts allow you to deposit your business revenue and let it multiply over time, according to the interest rate.
There is also another type of account, known as the cash management account. You can think of this account as an amalgamation of a checking and savings account. You can choose a bank account type depending on the unique needs of your business.
7. Seamlessly Smooth Transfer Options
Many businesses nowadays tend to have multiple business bank accounts. Let’s suppose that you already have a business checking account with another bank. While opening a second business account, look for a bank with smooth and clear channels for fund transfers.
Furthermore, check if the bank supports different fund transfer methods. The more, the merrier. You might find yourself needing to transfer funds amongst your different business accounts, so your bank shouldn’t place any limits on fund transfer.
If you want to make sure your business is successful, it’s important to have your financial management in good order, from choosing the right bank account, to setting up an efficient and effective POS system.
Such systems come with manifold benefits – you can access online data, create separate dashboards, monitor market trends, track employee performance, and more. After all, the golden rule of doing business is to make the most of advantages when you see them