While there are a number of steps on the way to successfully running a small business, few elements are as important as business banking and financial management.
Without the cash in order, a venture will struggle. And, as a result, the U.S. economy as a whole will suffer and consumers won't have access to these local companies that they have come to love so much. Therefore, entrepreneurs and business owners have to be on their game when it comes to handling finances in order to stay headed in the right direction and keep a financial plan on track.
Thankfully, there are a number of solutions to do just this. Here are some business banking tips and tricks for small companies:
Manage the day-to-day expenses
A small business isn't only bringing in the cash. Each day, a number of expenses pop up that require immediate attention, from office supplies to travel costs. As a result, finding ways to pay for these is an important step on the road to running a successful company.
According to the Federal Deposit Insurance Corporation, business credit and debit cards don't offer as many protections for users compared to those geared toward consumers. Due to this, it is vital that small business owners understand the rules to paying for items on a daily basis. For example, credit cards have to be chosen wisely. Each one provides a different interest rate, fees and other terms. Some even offer rewards. Above all else, make sure to pay the bills on time. However, there is a difference between consumer credit cards and business ones. The former includes protections not available for corporate cards, such as limits on issuer-imposed penalty fees.
"Some card issuers may voluntarily extend some or all of these consumer protections to business cardholders, but they're not required to, so look carefully at the terms and conditions you'd be agreeing to," said Elizabeth Khalil, a senior policy analyst in the FDIC's Division of Depositor and Consumer Protection.
In addition, small businesses may be more liable for unauthorized credit card use than consumers. This is especially true if cards are issued in bulk to a firm for employee use. In that case, the company may have to assume all liability in the event of a security breach.
Adapt a mobile mindset
While managing day-to-day expenses is important for a small business, there are also several trends that could impact operations in the near future.
For instance, mobile banking may be on the rise. Rohit Arora, CEO of Biz2Credit, wrote in an article for FOXBusiness that the interest in and prominence of this type of banking solution is on the way up due to new technology. Items like the smartphone have made managing money on the go easier than ever before, and there are a wide range of applications to help users simplify the process.
This is most widely done to check balances and statements, as well as transfer funds and pay bills, Arora explained. Better yet, some banks even offer a service where clients are notified of any suspicious activity through a phone message. Most people nowadays – especially small business owners – want the convenience of mobile banking. There is a distinct advantage to being able to perform these tasks from anywhere in the world at any time, and that means employees are no longer tied to the office in order to get their jobs done.
According to Arora, mobile banking will continue to expand throughout small businesses. The demand from this segment will most likely drive the market, and encourage more innovation and growth within the sector. As a result, more companies may be able to manage finances, take out loans and check their balances from their smartphone or tablet.