All major banks offer online banking, and most businesses can benefit from using it. Online banking allows you to:
- check your balances and view statements online
- move money between accounts
- make payments to suppliers
- set up regular payments such as salaries
- order chequebooks and statements
- download account information to analyse on your computer
Online banking allows you to manage your business bank account more efficiently, but it can also be very cost effective. Charges are often lower than for ordinary accounts and accounts may offer higher interest rates. Banks usually offer online banking services at no extra cost.
Larger businesses may also be offered 'PC banking' - this requires installing special banking software on your computer to manage your account. It allows you to directly link your accounting systems to your bank and can offer a more effective solution if you have a large volume of banking transactions.
Financial Fraud Action UK provides important information on safe online banking.
Switching to online banking
Before you go ahead and switch to online banking for your business, make sure you:
- Identify your objectives - eg you might simply want to reduce costs, or online banking may be part of an integrated IT system for handling accounting and payments.
- Check what services your bank offers and whether they meet your needs.
- Investigate what services other banks offer.
- Find out about transaction charges, interest rates and any standing charges.
- Estimate how your banking costs will change with online banking.
- Talk to your suppliers and customers about the kind of electronic payment options they would like.
- Assess whether you would need any additional equipment and whether any specialist set-up is required.
- Estimate the costs and timescales of switching.
- Identify which employees will be affected by the change and organise suitable training in the new system or procedures.
- Ensure that you have proper security - ie anti-virus software, firewalls and password protection - and ensure you include security measures as part of your staff training.
- Plan the introduction and testing of online banking.