Much to the relief of business owners across the United Kingdom, life is slowly but surely returning to normal as the worst of the coronavirus pandemic seems to fade. Lockdown restrictions continue to ease, and the government is actively trying to stimulate activity by encouraging consumers to start spending again.
While managing cashflow was critical over the last few months, you may find yourself facing a new set of challenges as we emerge from the crisis. With the furlough scheme coming to an end and loan repayments and deferred VAT bills becoming due, now might be a good time to explore opportunities to cut costs.
Let’s start with business banking. The thought of moving your accounts to a new provider may seem daunting, but you could save hundreds or even thousands of pounds. And the process has become much easier thanks to the Current Account Switch Service (CASS). CASS is free and guarantees that your account moves seamlessly from one provider to another. All you have to do is sign up for a new account, and the banks take care of the rest.
Choosing the right provider is a crucial decision, not to mention time consuming. While you may be more familiar with high street banks, don’t rule out the challengers, such as Revolut. Even if you want to stick with your current provider, consider opening a separate account with a challenger so you can take advantage of the better services they offer or the lower fees they charge. However, some of the challenger banks aren’t covered by CASS yet due to the comprehensive application process, so check the list of approved providers before you sign up.
There are tools which make your decision easier. For instance, Swoop’s comparison checker provides you with a personalised report showing how much you could save by moving your account to a wide range of both high street and challenger banks. We recently saved one of our clients £2,000 per year.
As you research your options, remember that there’s no such thing as free banking. Even before your introductory period expires, you may still be subject to fees if your balance drops below a certain level, which might have happened during lockdown.
International payments offer another opportunity to make substantial savings, especially if you use your bank as an intermediary. According to payments platform Money Mover, SMEs pay £4 billion in hidden fees when they send money abroad, mostly due to the spread charged by their bank on the exchange rate. This could be one of the reasons you choose to open a second account with a challenger. They typically charge a couple of pounds to process an international payment, while high street banks charge up to £25.
Finally, research by the Federation of Small Businesses shows that 62% of SMEs claim energy is a significant business cost, so make sure you shop around when it comes time to renew. If the date isn’t in your diary, add it today. You should be able to find a much better deal than the one you have at the moment because energy prices have dropped considerably. And don’t waste time trying to negotiate with your current provider, the best deals are usually saved for new customers. As with bank accounts, the switch is managed on your behalf, so once you’ve signed up with a new provider you can let the utility companies take over.
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