Here we take a look at five things not to ignore with your business bank account.
Unless you are in your first year, it is highly unlikely that you will have a business account without fees. The fees are payable on practically every transaction but the amount is dependant on the type of account you have, with whom and according to your terms and conditions. Read up about the fees you should be paying and ensure you spend time on a regular basis checking those fees are correct and you have not been over charged.
If your business can claim and charge VAT on goods then you must ensure the right amounts are going into the account to ultimately pay the VAT bill. Staff should be aware what products are liable for VAT so transactions at point of sale are correct. Granted, some businesses will have software at POS to negate the details but if it is a manual till then this is something everyone should be aware of.
Cards attached to the account can have automatic payments taken from your bank accounts. Make sure costs are logged and you know what is coming out and when.
Check statements to confirm the correct amounts have been taken out and also make sure there are always funds to cover any upcoming business needs. You should also use the time to ensure employees are not abusing the accounts with only legitimate business expenses being covered by the business and anything else needs to be billed back to the employee.
Discounts and Savings
Some accounts will give you discounts on services, which could include insurance – a costly area for some businesses. Read through all the paper work the bank issues you and ask the question What can you offer me? Savings on products is a big draw for some business owners but you need to maximise your savings, so read up and make sure you are getting benefits that will provide you some value from the start.
Whether you need it or not, there may still be an overdraft on the account. If you are going to use it, be aware of the fees and take those into account if you plan to use the overdraft. This option can be cheaper than a business loan if you need funds for a business expense and if funds will be replaced quickly. Try not to use it on a regular basis because you will become reliant on it and debt is not the key to a successful business.
In conclusion, make sure you know really take note of the details of your business account. Regular book keeping and using a reputable accountant will ensure youre never caught short and ultimately charged a large bank fee for the mistake.