How to Avoid Bank Charges for Your Business

One of the most frustrating elements of running a business, especially a small business is the charges and unexpected costs that come with using a business bank account.

Most small businesses will no doubt have had trouble setting up a business account anyway, so when it comes to using one, getting charged for the privilege can sometimes feel like being kicked while you are down. As a business owner, you are already subject to changeable elements within business such as interest rates but you shouldn’t also have to deal with unexpected expenses.

If you feel that business is going well but you are faced with a whole host of fees, charges and transactions you hadn’t planned for it may well be time to review and rethink how you bank. Standard business accounts are often generic when you start using them, but with some clever tinkering, negotiation and timing you can make them work for you.

Here are a few tips to avoid bank charges:

 

Get a free business account

Most business accounts charge you, that’s a given. Whether you are struggling or business is going well, there always seems to be a charge. This can be for things you expect, like business overdrafts and suchlike. However, the amount of electronic transactions you pay or the limits on business credit can mean you face charges.

Most high street banks will have lists of conditions, however challenger banks like Starling or Tide keep these charges to a minimum by negating the running costs of a brick and mortar presence.

 

Match your operations to your terms and conditions

When selecting a card in the first place, try and digest the terms and conditions quickly and see whether it fits in with how you work your cash flow and general business comings and goings. If they don’t quite match, then consider reworking how you do business.

There’s a lot to say for reviewing your operations and even more for adapting to an account that works with, rather than against your business.

 

Reduce the cash you pay in

It costs your bank money whenever you pay in cash. It’s all to do with paying counter staff and to ensure they have effective and safe security operations.

By reducing the amount of cash you pay in, you may be able to negotiate a better account with a lower cash limit. This may mean either stockpiling cash elsewhere, which is risky or more sensibly, encouraging your clients to pay with other methods.

You could ensure this happens by reducing their bill by a few pounds for the inconvenience. Some businesses offer a certain percentage discount for clients that pay electronically within 7 days. This also improves cash flow as it hurries up payments that may have before been delayed or late. It’s all in the small steps you can take to link up your overall business health.

If you have a small number of retail transactions, you may have to balance the cost of paying in cash against the percentage charged by card machines. Either way, it should result in less running costs and charges due to what comes with dealing with cash.

 

Review, review and review again!

Go through every statement that you receive. It’s so easy to miss charges and it’s also very easy for banks to charge you amounts you didn’t know were coming under a generic payment reference.

If you don’t recognise an amount or a certain payment, appeal them with the bank and re-check your terms. This can save you money over time and once put to a stop, shouldn’t occur again.

It will also tell you categorically when a payment was made and by who. This means you can see if clients or customers have paid on time and whether they are causing issues with your cash flow and ultimately avoiding your overdraft.

 

Chuck out the cheques

It’s best in this day and age to modernise and only accept standing orders or direct debits for payment.

There’s a good amount of businesses clinging on to cheques as they see them as more secure and traceable, however many are rejecting them as valid payment methods simply due to the fact they can easily bounce.

This can really mess with cash flow if it is for example, a monthly fee or something that is relied upon to be paid at a certain end of a month. With the sheer amount of apps, payment options and even intuitive invoices existing, there’s no excuse to still be using a chequebook and pen.

 

Negotiate better deals

Remember that you are a customer of your bank. If you are getting fried by bank charges each month but are turning over a respectable amount, then could you negotiate a better deal.

You have more power than you think, especially if there’s a healthy amount of cash going in and out of your account. Sit down with your bank’s representative and set out what you think you need and more often than not you’ll be able to come up with a solution that pleases both of you.

This kind of negotiation can give you much more wiggle room in the interests of cash flow. Anything you can do to make this better has got to be a good thing.

 

Go online only

If you don’t deal with cash, cheques and transactions that can normally only be done via kiosk services, then an online banking account might be your best bet to avoid charges. Negating that cost of effectively paying for counter service can mean you are more lean.

Avoiding paper statements too can mean you shave off a few pounds in costs per month as well and you have the benefit of 24-hour access for all of your services. For times when you do need physical copies, you bank can provide them in branch or the miniscule cost of printing them yourself can make the difference.