As an entrepreneur, especially as a small business owner, you’re constantly on the lookout for ways to reduce your business expenses while increasing your profit. For many businesses, banking fees are a burden that they would gladly reduce.
Are your banking fees high? Do you track these costs regularly and notice they’re going up? If so, it’s time to minimise your banking fees with our simple guide.
Understand What You’re Paying
The first step towards reducing your banking fees is understanding your charges and what you’re paying for. You should know what your bank is charging you. Astonishingly, a large portion of business owners is not aware of the various charges they pay regularly.
Common banking fees come from transactions, interest on loans, and various other services. Some banks charge an account maintenance fee, cash handling fee, as well as additional services charges.
How much are you spending on banking fees per month? Are the costs going up or down? Are there any new charges you were unaware of? Investigate this in detail to get the whole picture and to better understand what you’re paying for. Not all businesses pay the same fees. This depends on the type of business as well as its size. For example, the more customers you have, the more you’ll pay in transaction fees.
If you pay a lot in transaction fees, consider what other ways you could use to send or receive payments.
Use Online Banking
Online banking has transformed the way traditional banking operates. Using online banking services is easier, more convenient, and more affordable in most cases.
Today, most businesses already use online banking options, but if you haven’t made the switch, now is the best time to consider it. Besides being more convenient, online banking allows you to choose a service package that fits your needs, save a lot of time, and most importantly, stay up to date with your finances at all times.
You can check your bank statements, transactions, and balances whenever you want. This makes keeping track of banking fees quite easy. You can also save money on transaction fees when handling payroll since you can make several payments at once. Not to mention that you won’t have to visit a bank.
Automate Your Business Transactions
Almost any task can be automated nowadays and automating transactions has become the standard in the business world. Automated electronic payments not only save you time but money too since the charges are lower when compared to checks. Additionally, it is much faster since electronic payments don’t take a lot of time to clear. As a result, this helps improve your cash flow.
You should also encourage your customers to use electronic payments since it’s also faster and more convenient for them as well.
Think About Alternative Payments
Another thing that you should consider if you want to reduce your banking fees is alternative payment options. You are not obliged to use the POS machine for credit card payments. Besides being costly, these point of sale machines also come with hefty maintenance fees and may include other charges as well, depending on the bank.
If your business accepts credit card payments, one way you can do that is by switching to an alternative payment method such as PayPal, Venmo, AliPay, Google Pay, Apple Pay, SnapScan, and many others.
Asides from being cost-efficient, these alternative payment methods are preferred among customers because the checkout process is quick and simple and doesn’t require personal information. Research shows that people dislike complex checkout processes, hence the reason why they often abandon their carts and give up on their purchases.
Using alternative payment cuts the cost of using a POS machine, improves the checkout process, and helps build trust with your customers. No one likes to wait for anything these days, and being able to make a quick payment for a product or service you want is very important to consumers.
Even if you have a brick-and-mortar shop, alternative payment methods can help reduce the queues and attract more customers. It’s widely known that most people do not carry a lot of cash around with them if any. If your store doesn’t accept alternative payments, then you are rejecting a huge portion of potential customers.
Explore Other Options
Remember that you’re allowed to explore other banks and their services if you think your bank doesn’t offer the best conditions. Explore other banking arrangements that could benefit you more and take advantage of that. Some banks will offer certain benefits for new clients such as a period of no transaction fees (free transactions).
Look around to see what other banking institutions are offering and how your business can benefit from it. You may have an opportunity to significantly reduce your banking costs but you’re unaware of it because you’re stuck to your current bank. There are plenty of options out there so you should keep an open mind.