A recent survey by international payments specialist Airwallex has revealed that 77%
of small and medium-sized UK businesses plan to expand their international presence in
2022.
If this is you, or you already have customers or suppliers abroad, having a business account
that can handle multiple currencies seems like a no brainer.
But with loads of new tech and banking providers out there, picking the right account can be
tricky.
To get the ball rolling, here are 4 tips to help you compare accounts.
And, when you’re ready to go, at the end of this video, I’ve also included a step-by-step
guide on how to set up your brand new business account.
If you have customers overseas who want to pay for goods or services in their own currency.
Or you need to pay suppliers that are based abroad, you’ll likely face a conversion
fee for receiving a payment into or making a payment from your sterling account.
So you could typically end up paying a £2 to £15 flat fee and a 2-3% conversion fee
to receive a payment from a US customer in dollars, and then face a separate fee to pay
a US supplier in dollars - effectively a “double conversion” hit.
But if you had a multi-currency business account, which enabled you to make and receive payments
in dollars as well as sterling and additional currencies, you could avoid these fees altogether.
The business account sector has boomed in recent years so you’ll have loads of accounts
to compare, including a bunch of digital-only providers that tend to have more sophisticated
digital banking features and accounting tools.
Bear in mind, if your account provider is not a fully-licensed bank, as is the case
with some digital challengers, your funds up to £85,000 won’t be protected by the
Financial Services Compensation Scheme.
However, all providers that offer business accounts in the UK have to be licensed by
the Financial Conduct Authority, as an electronic money, or e-money, institution.
Just make sure the account you select can actually hold the currencies you want to trade
in.
And it’s also worth checking where your provider’s local currency accounts are domiciled.
For example, if your UK-based multi-currency account can hold US dollars, but it doesn’t
come with separate US account details, you could still incur international transaction
fees for dollar payments.
For many of us, our personal bank accounts simply tick away in the background without
incurring any fees.
The same does not always apply for business banking, where you could get hit with monthly
account fees, transaction fees or fees for using your card abroad.
When comparing the right business account for you, it’s a really good idea to get
a clear picture of what the fees could be for your business before deciding on one account
over the other.
To save you rummaging through the small print, we’ve dug out many of the fees and features
for different business accounts in a handy comparison table, which you can access by
clicking this link here at the end of the video.
Business account features will vary between providers, so it’s a good idea to think
in advance what features your business needs, like advanced accounting tools, the ability
to hold balances in multiple currencies or physical or virtual cards for your employees
to use.
Having multiple cards for your employees can be a great way to manage cashflow and keep
track of your expenses.
Plus, if those cards have low overseas spending fees, or the account they’re linked to lets
you pay in the currency of the country you’re in to avoid conversion fees, then that’s
an added bonus.
Be sure to check in advance for any fees that come with your employee cards before you go
handing them out.
Some account providers will charge per active card, while some may charge for each card
you request, whether it’s then used or not.
Different business account providers will set different limits on how much you can withdraw
or spend on your debit card each day.
There might also be a limit on how many transactions or transfers you can make each month before
a fee kicks in.
So make sure any account limits are in line with how you’ll use the account, whether
you’re a big spender or slightly stricter with those purse strings.
If you’ve given your employees cards linked to the business account, as the main account
holder you’ll also be able to set limits on individual cards and track employee expenses
and spending in real time.
Now I’m going to run through how to set up your new business account, using Airwallex
as an example.
Before we get stuck in, here is a list of the documents and information you will need
to hand when opening an account.
(This will appear as text on screen.)
This list might look slightly different for different providers depending on their specific
eligibility criteria.
So, here’s how to sign up with Airwallex.
Step one, create an account.
Step two, confirm your email address by clicking the big purple “confirm your email address”
button in the relevant email.
Step three is to add your basic business information, including business structure, company number
and the industry you work in.
Step four requires you to upload your business and personal identification documents, like
your certificate of incorporation and a passport photo or drivers license for any directors
etc.
For step five you need to add some basic details about how your business plans to use Airwallex.
The final step is to review all your information and make sure it’s correct before hitting
submit.
For more information and to start comparing business accounts, visit finder.com by clicking
this link here.
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