Business accounts are banking accounts that are specific to business. There are many business banking accounts with tools to help your business run more efficient. If you are confused about business finance, research and talk to a banker about the advantages of a business account.
Why a Business Account?
Those who are self-employed and own their own business should consider opening a business bank account. These accounts and their managers are designed to give you advice, help you with income and outgo and are tailored to your specific needs.
You can open a business account with a software package to help your business get started. Higher software packages can help you structure your business, provide you with outlines for business plans and give you strategies for long and short term planning are available through business accounts.
Enjoy the convenience of Internet and telephone banking options. Banking online or over the telephone provides you with more time to work on your business. You can pay bills, make transfers and transact other types of business banking without standing in long queues and wasting your valuable business time.
Opening a business account provides you with your own account manager. A bank account manager is there to offer advice and service to grow your business. Banking account managers have years of experience in dealing with business finance and are expert in suggesting ways to keep your business running smoothly. Account managers at your chosen bank will also give you advice and be a business consultant when you need different expert opinions.
Business accounts include many of the charges as regular account customers. Unpaid direct debits, bounced cheques or overdraft limits do incur charges. You will be penalized for these, but you will also have an account manage available to give advice on how to reduce fees and avoid penalties.
Depending on what bank your business account is in, you may be charged on a daily, monthly or quarterly term. There are some banks that charge fees when a specified amount of transaction have been exceeded.
You can avoid banking charges by understanding the rules. Your account manager plus information pamphlets from your bank will give you information on why and when you will be charged account fees. You can also avid charges by utilizing the following tactics:
- Internet banking can help you avoid charges on money transfer and everyday transaction.
- Direct debits and standing orders will eliminate labor costs
- Avoid using cheques that may bounce and cause very high fees.
Opening an Account
Research and compare business accounts at different banks until you find the right one for your needs. To open a business account you will need a Certificate of Incorporation (Limited Companies), ID, and a list of people authorized to sign cheques. You may also be required to submit a business plan. Oh, and you will need to have a deposit ready to fund your account.
Opening a business account and establishing relationships with a bank may give you the options to borrow for your business. Your account manager will be able to advise you on the best borrowing options for your business. Consider the following options if you need cash for your business:
- Overdrafts: These can help if you are running out of funds in the very short term. Overdrafts are expensive but do give you the peace of mind knowing your checks will not bounce.
- Business loans. If you need more money than a simple overdraft provides you, your account manager may help you set up repayment terms and provide the proper amounts you need to cover your day-to-day business transactions.
- Government Grants: These are available for start up business or businesses that are not security funded. Contact your banking manager or account representative to find out how to apply for these government grants and/or loans.