Minimising bank charges – it’s easier than you think
Last updated at 09:35, Monday, 14 December 2009
Many businesses go to great lengths to find the best business banking provider for their business, but fail to then manage their business banking to maximise the benefits available to them.
There are many ways to reduce banking charges by choosing to handle transactions in a certain way, some of which are explained below.
- Know your terms and conditions. It doesn’t sound like fun, but by knowing your business banking terms and conditions you can then manage your account to make your business more profitable. If you know the transaction limits, e.g. the maximum free cash pay ins, on the account you can maximise the free elements and work round these to reap the most benefits.
- Checking your account daily and reviewing statements fully is something we all know we should do. However with the complications of everyday life it often gets overlooked. For example, you may spot a missed payment from a customer early enough to avoid going overdrawn.
- Automate as much as you can. This is likely to reduce the charges you incur for paying in or withdrawing cash at the branch.
- Use your business debit card to pay for expenses – this reduces the requirement for petty cash and the charges for withdrawing cash from a branch. Pay regular bills by direct debit and encourage customers to pay invoices direct into your bank account. You could add your bank details to your invoices to make this easy for customers to pay you directly. As well as receiving payments quicker it can reduce the likelihood of receiving cheques which may bounce and therefore harm your cash flow.
- Use internet banking; it’s cheaper for a bank or building society to run so they often offer advantages for using it rather than a normal counter service. Pay your less regular bills with online payments and transfer money between accounts electronically.
- Check if your bank or building society is participating in the Faster Payments Service. The Faster Payments Service allows customers to make faster electronic payments, typically by phone or online banking, to transfer money between accounts or pay bills, or make regular standing order payments. This normally means that payments between participating banks and building societies will clear on the same working day rather than within the current three-day cycle, therefore some potential benefits to your cash flow.
By incorporating some of these techniques into your daily banking routine you could see the savings mount up over time. Think automated and save.
The Cumberland Building Society offers a range of business banking services including business internet banking and will shortly be offering customers with internet banking the ability to make payments using the Faster Payments Service.
- Lionel Dobson is business current account development manager at the Cumberland Building Society. For advice on all aspects of business finances, including savings and current accounts visit www.cumberlandbusiness.co.uk or call 0845 601 8396.
First published at 14:06, Friday, 11 December 2009
Published by http://www.cumberlandnews.co.uk
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