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Business bank accounts: What to look for

If you have just started a business, then getting your business bank account sorted out should be the top priority on your to-do -list. Business banking in the UK is a well-structured, informed, yet complex area, and there are both things that you should look for in an account and things that you should avoid. This article looks at some great business bank account features, and indicates some things to look out for.

Useful features

Cash flow efficiency It may sound obvious but you need a business account which makes your cash flow as easy as possible, especially in the early stages of your business banking. Look for accounts which consist of a minimum cheque book and a pay-in book to aid your financial planning. Accounts which have useful facilities like the ability to set up multiple direct debits (check if there are any limits on how many you can do because if you can't pay by direct debit, this may negatively affect your relationship with your suppliers) and standing orders. Charges and interest Keep an eye on the charges and interests associated with your account and if possible, try to get an account which allows you an interest-free overdraft up to a certain limit. Some small business banking facilities only allow up to around £500 (as of July 2011) of interest-free overdraft. Moreover, check the costs for things like having payments returned. Something as simple as a mistake in the account numbers can get payments returned, and even if it's only a 1% charge, this could account to hundreds, if you are paying large sums of money. Access You should get an account with a telephone, mobile and internet banking to ensure that you can access funds at any time. If you will be travelling a lot, make sure that you can get a business banking service abroad.

Some things to look out for

Business banking advisers Sometimes, banks will offer you a seemingly great deal on a business banking adviser, but ask yourself whether you really need it or not. Some new businesses end up forking out hundreds a year on banking services which they never needed. Deals which sound too good to be true The number one rule is that if a deal sounds too good to be true, it won't be true. Some banks offer attractive business packages to new account holders, but read the small print for the limitations and restrictions. You need a bank which works with you, not against you.

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