If you've recently launched a venture, discover the keys to selecting a suitable business account.
Getting ready to launch your own business? Great! Now, let's talk about choosing the right business bank account for you.
First off, if you're planning to create a limited company, a business bank account is legally mandatory. If not, you can stick with your personal account. Setting up a business account is much like establishing a personal one, the major difference being that these accounts are exclusive for business transactions. To open one, you'll need documents like proof of ID, proof of address, a registered business address, and contact details.
To pick the perfect one for your enterprise, you should first evaluate your business. If you're just starting, you might want a bank with lower fees. More established companies, however, can shop around for a wider range.
Next, consider the type of transactions you'll handle most often. If you're expecting a lot of cash payments, a bank with physical branches could be the way to go because it makes depositing a breeze. On the other hand, if you think you'll be handling fewer cash transactions, a digital bank could be your best bet. Digital banks effortlessly integrate with accounting software, saving you time on manual data input. Plus, they often allow you to attach receipt photos to transactions, streamlining expense tracking.
Transaction limits are another crucial factor. Some banks charge extra for processing transactions over certain thresholds. Make sure you select a bank that doesn't nickel and dime you for processing your transactions.
When choosing a business bank account, fees, and transaction limits are top of mind. Don't splurge your hard-earned money on unnecessary banking fees. Watch out for introductory offers and bonuses, but don't blindly follow them. Once they expire, you'll be left paying the regular charges. The Federation of Small Businesses states that monthly fees can range from £5 to £25, so avoid overpaying post-introductory periods.
If you plan on handling international transactions, ensure your bank supports deposits from foreign accounts. Digital banks are typically simpler to pay into from overseas, so this detail is worth keeping in mind as well. Lastly, if you think you might need an overdraft at any point, or even if you don't, investigate overdraft fees. Be aware of the cost of an overdraft and the size overdraft you'll be eligible for—this largely depends on your credit score.
- To minimize potential banking fees, especially when starting your business, look for a bank offering lower fees for new enterprises.
- For businesses anticipating significant cash transactions, opt for a bank with a network of physical branches for easy deposits.
- To streamline expense tracking and save time, consider digital banks that integrate with accounting software and allow receipt photo attachments.
- When managing international transactions, pick a bank supporting deposits from foreign accounts, with digital banks often being simpler to pay into from overseas.
