Keeping with our expert advice series we spoke to Alex Lau, business & personal banker at RBC to find out his top 5 business banking tips.
1) Keep Cash Flowing
As a business grows, so does its need for cash — to build inventory, buy equipment and pay additional employees or suppliers. In most cases, the cash is needed long before the business sees higher revenues.
To keep the cash flowing freely as your business grows, consider cash-flow strategies that bridge the gap between when expenses must be paid and when money from clients and customers is received.
2) Improve access to financing
As your business assets grow, you may be in a better position to borrow against them, leveraging your success to access funds you need to finance growth. While lenders won’t ignore the risks involved, a growing business may open doors to financing.
3) Your support team
Ensure that you have a team of professionals: lawyer, accountant, banker, book keeper to assist you in the management and operation of your business. Stick to what you are good at and let the professionals do their job. Make sure you put your team in contact with each other so there is an ongoing dialogue to ensure that all the parts of your business are working towards the same goal.
4) Go online!
Take advantage of mobile and Internet banking to keep track of your transactions and manage your day to day. Leverage technology to send funds electronically to suppliers or pay employees. Use online banking to pay CRA to avoid late fees. If you leverage online banking channels you can also minimize your banking fees by signing up or switching to an “eAccount”
5) Always pay CRA
So many times clients have become successful but have kept poor control over their tax remittance situation. A third party demand from the government is the quickest way to torpedo a successful business. A great best practice is to open a savings account and use it save for quarterly/annual tax remittances.