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Factors To Consider When Choosing A Business Account

Mar 15, 2008
When starting your business a vital concern is the business account you choose, there are many factors to consider such as the costs involved in transactions and borrowing, the facilities that your bank provides and the relationship you will be able to foster with your account manager. All of these factors will affect your business in a variety of ways, after all the security and efficiency of your finances is an essential element of success.

Firstly you must set up an account if your business is to be run as a limited company. This is mainly so transparency of your finances is apparent and detailed reports on the account can be produced. However, if your business is to be run as a partnership or you are operating as a sole trader; your personal account can be used. This however is rarely advisable as it is useful to make a distinction between the different types of account you may possess.

It is not always necessary to open your business account with the same bank that look after your personal finances. Although you may have already built up a good relationship with the bank that control your personal account, giving control of all your finances to one bank can be a mistake. Added to this, if you do choose a business account purely because you already have an account with that bank, you may miss better offers that are available to you from other banks.

When opening an account for your business, make sure to study all the options in detail. With so many offers in a saturated marketplace, choice is currently amazing. Ensure you compare the costs and charges that are associated with the accounting package. There is a wealth of packages available and through in depth consideration it is possible to find the account that will cater for your business needs perfectly.

It is really worth only looking at banks that have a strong heritage and background. While smaller banks may offer deals that are enticing, the security of your finances should be your primary concern. Look for names you know in the financial world, it is even worth using online banks, just make sure that the institution that owns them are a known and trusted industry player.

Bank charges should be of prime importance when opening a business account. How much it will cost to operate your finances is a worthy consideration, if you perform a lot of transactions these costs can be astronomical, so get a good idea of how you will use your account in order to find the best deals in terms of charges. Many banks will offer free charges for an interim period, this however will not last and so making sure that the charges that begin after this initial period are preferential for your business.

Online banking is increasingly becoming an important part of account packages, as they allow access twenty four hours a day they are extremely useful for those who operate under a hectic schedule. They can save time and energy by removing the need to phone bank representatives and spend hours on hold. The benefits may seem fractional but your business will see results by employing online banking solutions.

Interest rates with business account packages vary immensely from one bank to the other, but before opting for the account with the highest interest rate, remember that there is usually a trade off between interest rates and banking charges. Considering the benefits of interest in relation to bank charges is vital for achieving efficient finances.

Most major banks will have some form of small business team that will be able to assist and advise on commercial matters. Having a dedicated team behind you will help your business in a number of ways and in theory increase the chances of success, as most businesses fail in their first few years it is essential to get as much help as possible during the start up phase.

If you follow this advice, there is no reason why the relationship you have with your bank, and the efficiency of your finances should not be a complete success. Remember to think logically and plan every step in detail, a comprehensive methodology is one step towards owning a successful business.
About the Author
Financial expert Thomas Pretty looks at what considerations should be made before opening a business account. To find out more please visit http://www.lloydstsbbusiness.com/accounts/index.asp
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