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Changing your business bank account can be a complicated process. There are legal, financial, and security considerations to consider, as well as tax implications. When should you switch? We have the answers in this guide!
A corporate bank account is required for every company. It not only ensures that your personal and corporate funds are kept separate, but it also assists you with essential commercial transactions. Your business bank account needs will alter as your company expands. One of the reasons you should change your business bank accounts is because your company is growing.
When you’ve determined that your present bank account no longer meets your company’s requirements, it’s time to start exploring alternatives. Make sure you follow the procedures below before making a choice.
1. Determine your company’s banking requirements
One of the reasons why firms contemplate switching business bank accounts is because their company demands are changing. Before you can discover a bank account that is right for you, you must first figure out what your present and future company requirements are.
Some company owners want a bank with extended hours, while others choose to bank with a financial institution that can meet both their banking and financing requirements. Whatever your expanding demands are, they are a critical issue to consider when choosing a new bank to deal with.
2. Look for new bank account possibilities.
When considering banks, it’s critical to examine not just your immediate requirements, but also your long-term goals. It’s crucial to identify bank account alternatives that can scale with your business’s development as it grows.
When comparing bank account alternatives, take into consideration not just the benefits these accounts provide, but also the associated fees, rates, and other banking characteristics that will help you determine which is the best fit for your company. It’s also a good idea to inquire about the bank’s loan products, financing alternatives, and capacity to interact with your accounting software while looking for a new bank.
3. Keep a record of any payments that are made automatically
Take note of any automated payments you have already set up in preparation for registering for a new bank account and canceling your old one. To avoid getting into difficulty with your suppliers, don’t terminate your previous account until these payments have been posted. Make a note of all your automatic payments as well, so you can transfer them to your new account once it is set up.
4. Choose & Apply for a New Business Bank Account
It’s time to register a new bank account after you’ve decided which bank account would work best for your company. Applying for a new business bank account follows the same steps as applying for a new personal bank account. This, however, may differ depending on the bank.
Check to see whether an online application is available or if you’ll have to travel to a local branch to create an account. In any case, make sure you have all of the appropriate documentation, such as your personal identity, business papers, and financial records. Check your online and mobile access, debit cards, ATM access, and money transfer capabilities after your new account is set up. You’ll want to double-check that everything is in functioning order.
5. Make any necessary changes to any automatic payments.
Don’t forget to set up your automated payment transactions once your new company bank account is up and running. Make a last check of the list you made in step three to ensure you haven’t forgotten anything. Make any required changes to your automated payments to ensure that you don’t miss any deadlines.
Inquire about a “switch kit,” which is often geared for companies, at your new bank. When you transfer any automated transactions using this kit, the bank will inform any service providers and suppliers with whom you do business. Some banks include an account transfer form that you may use to inform your suppliers, service providers, and even customers that you have switched banks.
6. Get rid of your old bank account
You may now cancel your previous bank account if you are convinced that your new bank account is completely functional, that all automated payments have been moved, and that any physical checks issued on your old account have cleared. A business account must be closed in person in the vast majority of circumstances.
Your bank will most likely want you to complete specific paperwork in order to close your account. If you have any outstanding transactions, double-check that your account balance is sufficient to cover them. After all outstanding transactions have been completed, the bank will deliver the remaining monies to you or your business’s authorized agent.
Signs That It’s Time to Change Your Business Bank Account
Your bank account and where you bank may have a significant influence on your company. You sometimes feel compelled to change your bank account, but you’re not sure whether this is a smart idea. When this occurs, you should look for signals that indicate that a switch is required.
The following are the top five Signs That It’s Time to Change Your Business Bank Account.
1. Your account fees are excessive
The majority of bank goods and services have associated costs. When it comes to keeping your bank account, it’s important to think about your monthly and yearly expenses. Fees for account maintenance, excess transactions, account inactivity, printed statements, ATM withdrawals, cash deposits, and other fees may mount up quickly and have a significant impact on your company’s budget. If you believe you’re overpaying to retain your account, it’s a sign that you should look for an alternative, less expensive solutions.
2. Your bank is unable to meet your requirements
Most bank accounts have limitations, such as the number of free transactions per month, whether or not you may deposit cash, and the maximum number of deposits you can make. These limitations may represent a roadblock to your company’s expansion. You may also have requirements that your present bank does not meet, such as overdraft protection, business software integration, or other services critical to your company operations. If your present bank is unable to satisfy your rising demands, it’s time to look for a new one.
3. You want to do all of your banking online.
Another clue that you should convert to an internet-only business bank account is if your company has outgrown conventional banking and now prefers to bank entirely online. Perhaps you’ve gotten too busy to go to a real branch to complete your banking operations, or you travel too often and need to access your bank account. Switching to a digital bank might simplify your banking experience if you want to bank wherever and whenever you choose.
4. You are dissatisfied with the service you have received
If you are dissatisfied with your current bank’s customer service, switching to a new bank is an excellent idea. Maybe the personnel is nasty, or maybe they don’t know what they’re doing, or maybe they didn’t manage your problems appropriately. For a variety of reasons, you may have been unable to establish a positive financial relationship with your bank. Whatever the source of your disappointment, it’s wise to transfer your business somewhere where you may receive better service and a better deal.
5. You need more access to business products.
If your present bank only offers a limited number of business products, it may not be able to fulfill your company’s rising demands. If you need additional business products that your present bank does not provide, such as loan products, credit cards, or merchant services, you should consider switching to a bank that can meet your demands.
Conclusion
When picking a business bank account, think about its scalability in terms of your future demands as your company expands. Changing banks may be the best option if your present bank account no longer meets your requirements, or if you encounter one of the indicators listed above.
Frequently Asked Questions
Can I switch my business account to another bank?
Yes, you can switch your business account to another bank.
