Online banking and your business

Choosing a suitable bank account is an important part of your business planning.

Increasing numbers of individuals and businesses are opting to use online banking, which can have a number of positive benefits for small businesses, including:

• A reduction in the time spent away from the office in order to visit the bank
• Staff wages and bills can be paid by BACS, thereby reducing the need to use cheques, and aiding cash flow
• Remote access via a PC means you can bank when it is convenient for you
• Higher interest rates are often available, as a result of lower running costs

However, you should also be aware of the following points:

• On the flip side of the added convenience, online banking means reduced personal contact with your bank
• You will need to have easy access to a PC with an internet connection; broadband connections offer the fastest access
• Cash transactions will still need to take place at the bank or ATM.

A note on security

Levels of security for online banking are generally very high, with banks providing the necessary login and password systems. However, as with all personal data, it is important to be careful who you pass your details on to. Recent 'phishing' scams, whereby fraudsters have sent emails to customers asking them to 'confirm' their bank account details, have highlighted the need to be vigilant. Banks will not normally ask you to divulge such information, so you should be wary of such requests.

You should also be aware that your existing system of signatories may not apply to your online account. While your normal bank account may require more than one signatory, with different transaction authorisation limits for each signatory, the same may not be true of your internet account.

If you have set up online access to your bank accounts then you should check with your bank that the security you require is in place, and that signatories do not have more access than is appropriate.

Useful link

The British Banker's Association's Business Account Finder offers comparative tables on a range of different business bank accounts, including introductory offers, charges, and interest rates:

www.bba.org.uk