You have successfully registered your business and you are good to go. But there is at least one more step to take: find a bank and open a commercial bank account. Here’s more information on how to find the right bank for your business and how to open and manage your business account, according to smallbusiness.co.uk.
Know the needs of your business
The first step in finding your bank is knowing your business needs. What does your business need in terms of banking and payments services and what will it possibly need in the future?
Find your bank
The internet is full of different and sometimes confusing offers from various banks. But once you know what you need, it’ll be easier to get the big picture. Familiarize yourself with banks, their services and their terminology. Check and compare their terms, fees and charges. Be aware of hidden charges such as currency exchange or money transfer fees.
If you need a loan: compare interest, term, grace period, and other factors. Check what the bank will charge for cash withdrawals, wire transfers and cross-border payments, using your overdraft, receiving card payments, and using the credit card. Also confirm the type of businesses the bank accepts, as some only accept large businesses.
You can choose from different types of banks: small banks, online-only banks, investment banks, or banking and payment service providers. Which one is right for you?
You may want to consider accounts at two different banks to manage different parts of your business – perhaps one for outward facing activities and one for internal costs such as salaries, to spread your risk. You might even get better deals if the banks know each other. After all, you are a paying customer and they are making money from you and don’t want to lose you as a customer. You will also find accounts specially designed for new businesses. They are free at first, but will become a monthly or annual fee after a while.
Pick a few of the banks that you think could offer you exactly what you want and get in touch with us. During a personalized meeting, the bank advisor can answer all your questions.
Be aware that, compared to a private account, banks frequently offer different services for business accounts and also apply different fees (for example, administration fees and annual fees). However, we strongly recommend that you do not confuse your corporate banking business with your private bank account. This will make it difficult to keep track of your money, especially when your business is growing and there will be more banking transactions.
Required documents
Once you’ve found your bank, opening an account should be easy. Simply bring the required documentation to your meeting with the bank advisor. If in doubt about what documents you will need, ask the agent what exactly you need to bring.
Here is an overview of the information a bank can request: identification of all appointed company directors – passport, driver’s license with photo or national identity card; Tax Identification Number ; proof of address – recent bank statement, or utility bill, or residence tax statement; business details (e.g. business address, contact details, name, business type, business house registration number (for public limited companies and corporations people) and estimated annual turnover.
Bookkeeping account
First of all, consider hiring an accountant, especially when you are not experienced in this area. It can really pay off in the long run. Of course, you can also do the bookkeeping yourself. It all depends on what you can afford and what makes the most sense for you and your business. Another option would be to do your own bookkeeping during the year and only hire an accountant to do your annual financial statement and tax form. When tackling books on your own, consider investing in professional software that reduces your workload.
The law requires that every transaction be traceable and transparent. This means that you need to be able to keep track of your banking transactions at all times and archive all your records for the required length of time (make sure you know the local law on how long to keep documents).
Finance management
While it may seem obvious, be sure to protect your finances – only allow staff you can fully trust to access your bank accounts and complete transactions.
Plus, regularly check your bank statements, always monitor all the transactions you make, and keep a record of receipts to make sure cash flow is being managed efficiently and you don’t incur overdraft as it could get very expensive. . This way, you can be sure you have enough money in your account to manage your funds efficiently and to pay your employees, bills and taxes on time. Keep your eyes peeled for hidden costs like payment charges to other banks or currency exchange fees to avoid unpleasant surprises.
Money management and in particular the management of accounts receivable becomes more and more difficult as you have to manage more and more clients and transactions. Identifying the banking transactions corresponding to a certain customer account can be a tricky task.
If you have followed our recommendations and tips above, your business will be on the right track to becoming a success. However, check regularly to see if the bank account and its features still meet your needs. Look for better options in different banks, more up-to-date features, etc. You might even get a better deal from your current bank.
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