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Gillian Caughey shines a light on what to look for in a business bank account for your creative practice or business.
As a business owner you are legally required to keep records of your business’ financial transactions. Having a separate bank account means you don’t have to painfully unpick business transactions from your personal spending. Other benefits:
There are a variety of different bank accounts on offer. These range from traditional business bank accounts from large high street banks through to smaller banks which often have a sector specialist approach such as charities or businesses with a social purpose.
Business bank accounts generally charge transaction and monthly service fees. Shop around as fees and services provided for them vary.
In addition, if you are a sole trader you may be able to use an additional personal or savings account. Whilst this saves on fees you need to check whether the terms and conditions of the account allow you to use it for business purposes and whether it provides you with all the functionality you need such as an overdraft or credit card.
Make a checklist of what features and services you need. Rank them in order of importance to you. Then use this to help you focus when faced with the mind boggling amount of marketing information out there. Volume and type of sales and purchases transactions to help you understand what type of transaction fees you will incur most and the likely cost. Ask yourself:
Free banking periods - offered by the various banks for new businesses. These range from six months upwards. Use internet comparison sites to identify current offers and fees
Location - do you need a local bank to pay in cash or cheques? If so, location(s) and convenient opening hours will be key
Technology – online and mobile banking services provided and their usability vary greatly. Consider checking the services out beforehand either through the bank’s website, in branch or through friends who use them
Customer service ratings - especially for online and phone support. Do they have specific specialisms in your sector?
Funding - what is likely to be available to you, when and at what costs?
Ethics and ethos of the bank - areas to consider include investment policy on key areas, social and environmental impact
If you are finding it difficult to choose between a few accounts or banks, speak with them in order to ask them more detailed questions and try out their customer service. This could be on the phone, in person or via online chat.
Former Bank Manager turned Business Consultant, Trish McClay, shares her top five tips for getting the most out of a business bank account:
1. Talk to your bank
Your Bank Manager can often identify problems before they arise due to their experience. Tell them your plans for the business and who is on your prospect list, they may be able to give an introduction.
2. Don’t be shy asking for help
Ask for tips on being smarter with your money such as how to reduce banking costs.
3. Don’t try to hide cash-flow problems
The earlier it is highlighted the more they can do to help.
4. Access to funding
Either from the bank or to be signposted to other sources of funding if they are unable to assist at this point.
Local business events
These free events provide information on a wide range of topics as well as providing networking opportunities.