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Advisory Points For Those Choosing A Business Account

Jun 13, 2008
An important decision in the start up process of your business is to decide what type of bank account will hold your finances. Just as important as the type of account services you choose to utilise for your business is the bank that will have your account. On the top of your considerations should be issues such as the cost of transactions and charges you may incur for borrowing funds. In addition the relationship you will be able to build with your bank should also be a major concern.

Here are some of the most common questions and advice needed for those choosing a business account when starting operations.

It must be remembered by those starting a limited company that it is a necessity to open a business account. This is for reasons of clarity when it comes to issues such as tax returns. Auditors will often want to see a separate financial structure for business transactions for limited companies or partnerships. If you are commencing operations as a sole trader you will not necessarily need a business account as you will be able to use your personal account, for reasons of professionalism however it is sometimes advisable to open one anyway.

When you are considering which bank to open your business account with it is rarely advisable to open one with the same bank that already controls your personal finances. This is because it is often the case that putting all your financial eggs in one basket can be risky. Added to this, by opening with the bank that already has your personal account you may miss out on introductory offers available to your business.

It is vital that you compare the business account options from a number of banks. The market is currently packed with packages that offer a wide array of different services with diverse pricing structures. Make sure that you weigh up the charges of each account package carefully, not only looking at the introductory pricing structure but also recognising how charges will be calculated in the long term.

While you may be able to find unbelievable offers in terms of charges and interest on the internet, some of these companies are young and could be unscrupulous. Arguably it is a better idea to open your account with a well known bank as the financial platform created for your business will be firmer.

Many banks may offer you great interest rates for your account to try and lure you to their institution, of more importance however should be the charges you will have to pay. The introductory period may indeed supply you with free banking but this rarely lasts, eventually you will have to pay charges. Subsequently it is important to research the bank's literature in detail to assess whether your business will be able to pay the charges levied by the bank.

Many banks are now offering online banking services to their business customers; this is an important service for those who have trouble getting to the bank during working hours. Twenty four hours a day access is vital to many businesses and hence should form some part in your choice of account package.

It is almost always advisable for those starting out in business to utilise the bank's small business team. The advice they offer pools years of knowledge and experience and can be a valuable asset, it may come at a premium but this premium is usually a small price to pay for the benefits gained.

By following these advisory points it should be possible to find the right bank account for your business. Remember to carefully consider the options and take a great deal of time over the decision. By creating a solid financial platform you will improve the chances of success for your business.
About the Author
Financial expert Thomas Pretty looks into the considerations that should be made when selecting a business account package for your company.
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