When looking for the best business account for your practice, there are several factors you should consider - such as a good interest rate, low fees and merchant facilities. It’s also just as important to set up your finances for the type of practice you own and the way you want it to grow in the future.
So where to start? Talk to your accountant about what you want to achieve with your practice. Your goals will determine the best type of account or mix of accounts for your individual situation. Ask yourself: what do you want to do with the business over the next few years? What do you need right away? Should you be parking some of your cash in a term deposit, or does it all need to be available in a transaction account?
Every type of business account has different features. A traditional transaction account may give you easy access to your money but offer a low rate of interest, whereas a business savings account will offer the highest base rate of interest and still give you instant access to your savings.
Some business accounts may charge you fees for features you don’t need, so it’s important to know what features you are actually going to use and which you won’t. It’s worth looking for a transaction fee-free account if you can. With the maximum monthly account-keeping fee being as much as $22 per month these fees will add up over time.
Merchant facilities refer to the payment terminal or payment platform used by businesses to accept credit card, EFTPOS or debit card payments. The system then settles the payments into a linked business account.
There are a bunch of different options out there for businesses to receive payments - payment terminals and eCommerce solutions available from big banks, plus newer options such as the Square Contactless and Chip Reader, which can accept tap and go cards, chip cards and mobile phone payments.
Different fees and charges apply to each payment option and vary between provider, so it’s worth shopping around. Common fees that are associated with merchant services include credit and debit card processing fees and payment terminal hire fees.
Adding a claims payment platform such as HICAPS or Tyro HealthPoint let’s you offer patients the convenience of automatic claims processing on the spot at the time of payment. Which system is better for your practice may vary based on your personal circumstances. Both have their own pros and cons to consider. These days most health funds have apps that allow their patients to submit claims easily using their phones, so you may decide not to use a claims platform at all.
Many health professionals in private practice find that a mix of transaction account, business credit card or line of credit and a term deposit helps them structure their cash flow and plan for the future. In some cases, there is even greater flexibility within that broad structure.
For example, some banks may offer a structure called laddering, which involves setting up a number of term deposits that mature at different times, such as 30-days, 60-days and 90-days. As the first, shorter deposit reaches maturity, it rolls into a 90-day deposit. The same with the next one, the 60-day deposit, and so on. This effectively gives you the interest benefits of a 90-day term deposit but makes it available every month. Of course, the final mix of your business accounts is something you should discuss with your accountant.
Looking for the best business account for your practice? Click on the link to read more about our business banking package.
The information contained in this article (Information) is general in nature and has been provided in good faith, without taking into account your personal circumstances. While all reasonable care has been taken to ensure that the information is accurate and opinions fair and reasonable, no warranties in this regard are provided. We recommend that you obtain independent financial and tax advice before making any decisions.