Banks – most of us loathe them but we all need them. Either for normal every day accounts, merchant facilities or their loan facilities.
But, where do you start?
Firstly, I always suggest with the bank you already bank with. Chances are you’ll get offered a bundle or some sort of loyalty freebie. Plus they’ll be very minimal clearance between transfers (if any!).
Secondly, decide what you need from your account. Are you constantly banking online or do you prefer the face to face experience at your local branch? Both are very different types of accounts so don’t get caught if you choose the one not right for you.
Merchant facilities are not cheap, anywhere. Someone always takes a cut. Don’t stop at the first bank, shop around explore your options and investigate third party providers and options whereby the client pays a fee for using their credit card.
On another quick note, Paypal is also becoming more commonly used. Remember that Paypal is treated as a normal bank account for tax purposes, so don’t forget to include its transactions in your bookkeeping records.
Another really amazing feature offered by most banks are debit cards. These are great as you spend money from funds you already have; not credit.
Certain times require credit facilities, whether it be financing the all-important ‘must have’ equipment, buying into a commercial space, getting another staff member or contractor in place etc etc. Obtaining credit is not so easy for small business as you need a current and strong financial history before the banks even start looking at your application. If you are going to go down the credit card route, aim to find one with competitive interest rates and maximum interest free days possible. Do ensure you pay off the balance before the interest free period runs out or you could be faced with exorbitant interest charges.
Shop around and make the banks for you.
Janna Fikh is the founder of Fletcher Tax one of Australia’s most socially active Tax Accounting Firms.