It’s easy to stress about taxes, but bank fees are costing you real money as well. Most people drastically underestimate how much money they give to banks.
When you are operating a business, every penny counts. That’s why it pays to hire accountancy services to guide you through every financial transaction, no matter how big or small. Reputable firms, such as H.M. Williams, offer honest and no-nonsense advice to help you make smarter financial decisions.
Relying on banks for various services is convenient, but can incur excessive fees. If you don’t manage it properly, it can hurt your finances over time. Here are a few ways you can lower or even avoid some banking fees for your business:
10 Ways To Minimize Banking Fees For Your Business
1. Pay Attention to Minimum Balance Requirements
Chances are, your bank requires you to pay a monthly maintenance fee for your business bank account. This fee can be as high as $50. But, your bank may waive that fee if you maintain a minimum account balance every month.
To make sure you will have enough money in your account to avoid paying the maintenance fee, monitor your balance daily. If you are busy, do know that some banks will allow you to set up online alerts for when your balance is about to drop too low.
It’s also important to be abreast with your bank’s policies. You’ll less likely exceed the limit if you know how much they charge for every transaction type, may it be over-the-counter, online, or via ATM.
2. Shop Around
If you think your bank is not offering you the best deal, do shop around. Visiting all of the best banks in your area should pay off.
Shopping around doesn’t mean just comparing monthly fees, although that is a big part of it. Check the fees for the services and transactions you use the most.
Simply taking advice from fellow entrepreneurs may not work—what’s a good deal for your friend’s business may be bad for yours.
Some banks will allow you to open a business account for free. Typically, free banking lasts for 1 to 2 years.
However, such offers usually come with conditions, so make sure to check them out first. For instance, some banks will let you cash in a certain number of cheques per month. If you are a retailer, such restrictions may not be good.
Moreover, be sure to know what type of account you’ll revert too when the bank starts charging you fees.
3. Link Your Bank Accounts
You may be able to qualify for a monthly fee waiver if you have more accounts with the same bank. You will need to link those accounts. If you are a sole proprietor, keep in mind that mixing personal with business banking is still not a good idea.
Qualified accounts vary from bank to bank. Typically, these include savings, certificates of deposit (CDs), and money markets.
Moreover, you will be able to transfer money more quickly and easily if you link your accounts. This will also allow you to avoid exorbitant fees when transferring money from one account to another.
4. Use Online Banking
There’s a good reason more and more banks are encouraging their clients to use online banking. It’s cheaper for them to run! If you do the majority of your transactions online, your bank may reduce or waive some fees.
This is especially true for bulk transactions. You can send multiple payments at once and you’ll only be charged a one-time service charge. If you have suppliers or customers abroad, you can save up a lot of money from expensive international rates.
Moreover, you can access your business’s bank account whenever you want—without having to stand in a queue. Even if the fees are the same (which is unlikely), you will save money on gas as well as time.
5. Know the Terms and Conditions
Make sure to fully understand the terms and conditions when you’re signing up for a bank account. While it isn’t the most fun activity, it is the best way to minimize banking fees.
You will have a better idea of how to make the most out of your account if you plough through all the terms and conditions.
For instance, your bank may allow you to write one hundred cheques before it charges you a fee. To avoid paying that fee, simply keep a written tally. When you get to one hundred cheques, stop writing them.
6. Automate as Much as You Can
Even if you are simply a sole trader, automation is essential to good bookkeeping. If you want to bank quickly and easily, automated bank transfers and standing orders are the way to go.
When it comes to online banking, most banks allow clients to set up future payments. Such features allow you to avoid late payment charges. It’s a good idea to encourage your clients or customers to use automated tools as well.
7. Check Your Account Daily
Many of us tend to skip this part, even though it is important. After all, forewarned is forearmed. Make sure to check your cash flow and your balance every day.
If you notice that a client is yet to make that large payment that is due, you may be able to do something about it before the bank hits you with an overdraft fee.
Make sure to meticulously pore over every bank statement as well. Most banks keep online records for around three months. That should be enough time for you to sift through everything before you move to a new banking period. Mistakes happen, so check for unusually high fees. The bank won’t fix their mistakes unless you challenge them.
8. Use Less Cash
Banks have to have security operations and pay counter staff when dealing with cash. Cash costs banks money, and they usually transfer these costs to you.
Cash handling fees are typically avoidable, so do what you can to limit the use of cash. For instance, you can offer customers a discount when they pay with credit or debit card rather than cash.
This also helps you keep better track of where your money goes. Unlike online transactions, cash transactions don’t appear on your bank statement. You may need to keep a separate record for your cash flow, which can be inconvenient and time-consuming.
9. Negotiate Lower Charges and Better Interest Rates
Your bank wants to keep you as a client. If your turnover is particularly high, they may even go out of their way to do so. Banks tend to reward good clients with strong banking records. If you think you’re getting a raw deal, negotiate one that you will like.
Jot down all the things about your bank that are annoying you, gather evidence that backs up your claim, and schedule a meeting with your bank manager. You’ll get bonus points if you bring leaflets from competing banks that have better deals.
Act with your feet if your bank is not treating you fairly. Your bank is your supplier—don’t feel like you are being difficult. Bank managers often have the authority to offer special deals to valuable clients.
10. Complain
If you feel like your bank is charging you unreasonably high fees even after you talked to the bank manager, you’re not out of options. Reach out to the Federal Reserve Consumer Help centre. If your business is in the UK, you can contact the financial ombudsman.
But, before you lodge a complaint with a government institution, notify your bank of your intentions. If your bank realizes that it’s cheaper to give you a refund than provide the paperwork to the relevant government office, they will likely apologize and give you your money back.
Cautiousness Cuts Costs
Cutting your banking costs is actually easier than you think. A little diligence and flexibility can go a long way. If you plan ahead and make small changes on how you handle your daily finances, you can steer clear of extra charges that could hurt your business.
Read Also:
- 6 Digital Banking Ideas You Can Borrow From Fintech Industry
- How is the Digital Wave Disrupting Cash Management
- 6 Brilliant Ways To Save Money While Living Independently
Author Bio: Michael has been working in marketing for almost a decade and has worked with a huge range of clients, which has made him knowledgeable on many different subjects. He has recently rediscovered a passion for writing and hopes to make it a daily habit. You can read more of Michael’s work at Qeedle.
