As you know, businesses are subject to much more tax reporting than individuals. Making sure everything goes smoothly comes down to even small details, like encouraging business-owning clients to be careful when they open a new checking account.
What should concern your clients: Most business owners want to know about total fees because they want them to be as low as possible. Account features are important, because features they need that aren’t included likely mean more fees. Finally, what’s the user experience? More specifically, what happens when you have a problem? This last feature can be why some clients prefer a local branch over a totally virtual relationship.
What clients need to know about fees: Business checking usually has a monthly service charge, but this is often waived if you meet minimum balance thresholds throughout the month. Banks usually limit your number of monthly transactions. Traditional banking gets you thinking about checks written, deposits and withdrawals.
Today, banking includes electronic funds transfers (EFT), debit card use, automatic payments and unexpected expenses. Their advice is to consider trading up to the next tier of service instead of trying to limit transactions. Think about what happens when you get into a data overage situation with your cellphone provider: You get charged.
What clients need to know about features: They need to align to the needs of the business. If only the basics, like deposits and check writing are included, you are in for extra fees if you take in overseas wire transfers, for example. Different banks offer different packages. Your client should be shopping around.
What clients need to know about the user experience: Everyone knows people who say, “I can’t tell you the last time I visited a bank branch.” That might describe your client, too, making virtual banking the way to go. However, they will need spectacular customer support. We’ve all called the cable, power or phone company and been routed through the phone tree as we scream, “Customer representative!” With online banking, you want to get access to a live person if you need them. People who preferr the personal connection because “your banker knows you” should be looking at brick and mortar banks.
So, how can you help your client? Start by forecasting their needs based on previous or current experience. What services will you be using? Next, compare business checking accounts offered by different banks. Where’s the best fit? Additionally, review their fee schedule.
It might be best to trade up and get more features instead of paying fees each time you need to use extra features. If you already have a business banking relationship, make it a point to shop around at least once a year. You have clients who review vendor relationships, making you compete to retain their business. However, if your bank is also your major lender, they might not you detach your business checking account.
Editor's Note: Consumersadvocate.com produced a report, “Best Business Checking Accounts Based on In Depth Reviews” in 2019. This article quotes extensively from the report.
Bryce Sanders is president of Perceptive Business Solutions Inc. in New Hope, Pennsylvania. He provides high-net-worth client acquisition training for the financial services industry. His book, Captivating the Wealthy Investor, can be found on Amazon.com.