Choose and manage a business bank account

Banks will provide you with information about their charges, but make sure you understand this information and are aware of the terms and conditions. Brochures and leaflets will highlight the standard charges and you will be advised of some of the non-standard fees before the service is provided.

Checking bank charges

Bank charges are usually taken monthly or quarterly. A statement detailing a breakdown of all fees is sent to the customer before the fees are taken. You should check this statement regularly to ensure that no other fees are being imposed.

If you do not keep to the terms and conditions of your account, the charges can be high. For example, banks may charge a referral fee if your account goes overdrawn without permission and if you accept a cheque that is returned unpaid by the debtor's bank, your bank could charge you an administration cost and you will not get the money due to you.

Keep bank charges to a minimum

There are ways to keep your bank charges as low as possible. These may include:

• negotiate for better interest rates and lower charges
• automate as many transactions as you can by using standing orders, direct debits and electronic payments
• use your bank's online services if any are available
• avoid unauthorised overdrafts
• minimise the amount of cash you pay into your account and the cheques you write out
• open a foreign currency account to make and receive foreign currency payments - you will avoid making exchange fees on each transaction and it allows you to hedge against foreign currency exchange rate fluctuations, however, you should check set up and transaction charges carefully
• find out what other banks would charge for the same services