How SMEs can save on fees
Small business owners could save $400 on average in banking fees if they took the time to shop around different accounts, a new survey says.
Retail and business finance researcher Canstar analysed 27 term loans, 80 credit cards and 25 deposit accounts and found that banks relied on small business customers being too busy to switch, because comparing business banking products was complicated.
Dowse Murray chartered accountant director Baubre Murray said most Wellington small businesses she spoke to would benefit from looking around at different banking packages, particularly when they took out business loans.
'There are opportunities there that the banks don't particularly let people know about," Murray said. "People aren't always really aware of the fees that they are getting charged till it comes to the end of the month because they just go out automatically."
Most people who started a small business went with the bank they already used for personal banking.
Paremata plumber Barry Guy saved $300 to $400 a year in banking costs when he changed interest-bearing accounts after discussing with Westpac how to make his accounts more affordable.
In business for 43 years, he described himself as a creature of habit when it came to his banking.
'The problem is that in my experience, and I'm probably guilty as anybody, we all tend to go along our merry way and forget about things like banks and insurances and so forth and just pay the bills when they come in.
'We have just recently restructured everything at the bank on the advice of our accountant, so we don't do too badly from our bank. We also have a personal banker who contacts us on a regular basis to find out how things are going.'
Murray said small business owners, who typically had large mortgages on their homes, should split their mortgage into parts on several terms to give them more interest rate flexibility.
Using internet banking was also cheaper and faster than writing cheques and processing all payments once a month.
Canstar managing director Derek Bonnar said small businesses should not be put off by the hassle of changing accounts. They should look for accounts that charged low fees or even no fees because these products were available. "You may not have to go to a new bank.
"You should ask your bank or small business manager if your account is the best one they can offer for your particular business needs.
'Many banks offer specialist small business managers and call centres who should be more than happy to review your current banking arrangements.'
ADD IT UP
Bank of New Zealand offered the cheapest transaction fees for small businesses, according to Canstar, but it pays to shop around.
The Dominion Post