Finding the right bank account for your business is a critical part to starting a business. Let’s look at some of the main consideration’s you should research before setting up a business bank account.

Who do you currently bank with?

Who you currently bank with is high consideration to a business, especially when first starting out. This is because transfers between banks can occur over night or take several day’s. Where as a transfer between accounts at the same bank can occur possibly instantaneously. This is important if you need to transfer money quickly to make business payments using personal funds or wanting to manage your money effectively.

What are the transaction fee costs?

Different banks and accounts will have different fee rates and charges for transactions. Some banks will charge based upon the number of transactions per month, so look into whether the account has unlimited and free transactions for domestic transfers. Look into the cost of overseas transfer costs also if your business intends to do overseas transaction’s. Prices for transfers or exchange fees and payments can vary considerably between bank’s. Hopefully you’re still not using cheque’s. But if you are, find out what the fees are for writing and depositing cheque’s.

What are the account fees per month?

Different banks and accounts will have different account fee’s. Ideally you would like an account with no account keeping fees. But you will need to research if a no account keeping fee account is right for your business.

What are the additional fee costs?

Banks will invariably have other fees that they can incur on your business account. The most notable is the overdrawn account fee. Check out the costs on this and any other fees a business bank account may attract given your business circumstances.

What additional bank accounts will I need?

The first additional accounts you may need are credit card and overdraft facilities. These can be helpful for managing cashflow in a business. Another is an interest bearing saver account for when you have idle funds sitting in your account that could be earning you interest. Online savings accounts are an example of these. Again, look into all the fees and charges associated with these additional bank accounts to consider as to whether they are suitable for your business.

What are the online facilities like to use?

We live in the age of the internet where the majority of transactions are now done online. So having online facilities that are easy to access and manage is an advantage.

How do I authorise transactions?

This is important as every bank has a different security process for your benefit. Security is critical for the accessing of your bank account’s. The level of security can vary for authorising transaction’s. Most banks now use two factor authentication, which requires two different ways to authorise the one transaction, for example a password and a PIN. Each banks required security and how you set your account management up will determine how this will occur. As a bookkeeper I am not happy with the need for some bank’s requiring a token key generator that is connected to a key ring. With the advent of smartphones one would have hoped we had transitioned away from the need for these.

Do they have an app I can use on my phone?

Being able to manage your business bank account on the go can be critical to most business owners. From being able to check if payments have been received from client’s to checking if you have enough funds for payment’s. Being able to check and perform transactions using a smart phone app is a definite advantage to the modern day business owner!

What other facilities will my business need now and in the future?

We discussed already that you may need additional bank accounts. But you may need other facilities to run your business. An example of this is a credit card or EFTPOS facility.

What is customer service like as a business customer?

It is great to have all the bell’s and whistle’s of an account. But the one thing that is always needed with any service provider is service. So do you as a business account holder receive priority service over personal account holder’s? Do you have a business bank manager who actually contacts you on a regular basis? Do you have a way to contact and speak with someone quickly to remedy or prevent issue’s? Find out what customer service level your bank will provide you as a business bank account holder as it could impact the relationship you have with your customers and suppliers when it comes to receiving and making payment’s.

Will I be able to download or integrate with my bookkeeping software?

Being able to have your bookkeeper access and transfer transactions with your business bank accounts can be critical to the running of your business. You will need to look at whether your account can receive payment registers from your accounting software, upload bank transactions for recording receipts and reconciling your bank statements. These are all important with modern day bookkeeping software so you can work with your bookkeeper to manage your finances effectively.

Hopefully this has given you a starting point for further research into which business bank account is best for your business. There are other factors you should consider but the above should assist you with the process.

Foley Business Management provides financial management solutions. We do this by assisting small business, not for profit and social enterprise make more informed business decisions around their finances. We provide bookkeeping, management accounting and reporting and consultancy services. If you are considering starting a business or have a business, contact us to discuss how we can assist you and your business to improve and make better business decisions.

The information in this article is general in nature and should not be relied upon. It is advised that you discuss with your relevant professional what financial products are best for you and your business before making a decision.