Business Banking – Keeping Your Accounts Healthy
There’s no room for
complacency when it comes to running a business, and running your account
is no different. You should check your statements carefully, and have a
periodic review of the market to make sure your account is still the best
one for your needs.
New accounts and special
offers crop up all the time, and it may be worth your while to change
banks. You can also point out the competition’s rates when negotiating
terms with your own bank – often these are flexible and a bank may offer
you improved rates if you hint that you are considering taking your
business elsewhere. Stay on top of bank charges, and if any show on your
account that you do not understand, contact the British Bankers’
Association for more detailed explanations on charges and interest:
www.bba.org.uk
There are ways to minimise
charges and run your account as smoothly as possible:
1. Automate Your Account
If you have frequent
customers, you could encourage them to make payments by direct debit or
standing order. The more electronic payments you have, the fewer charges
you will incur. The same goes for your expenses – try to use automated
services for all your regular payments.
2. Bank Online
If your bank account has
online facilities, make use of them. It is both more efficient and cost
effective. Larger businesses may be offered ‘PC banking’, which involves
special software being installed on your accounting computer, so that your
accounting system is linked directly to your bank.
If you find yourself
struggling, for example if cash is short and it’s becoming difficult to
meet the repayments on your loan, the best course of action is to visit
your bank and renegotiate your account. You should do your best not to
exceed any overdraft limit that has been agreed, and stick to the terms of
your account. If you break the terms of your agreement there can be stiff
penalties, such as referral fees and administration costs.
If you accept a cheque
which then bounces, you will lose the money owed to you and also incur a
charge. Be sure to write the number of the cheque guarantee card on the
back of all cheques
You should also keep your
records scrupulously accurate – noting all transactions and crosschecking
your records with your bank statements. Not only will this mean you can
query any discrepancies, but it will make filling in your tax return much
quicker and easier!
