SME clinic

Q & A

Q I oversee the accounts of a few companies, ranging from new start-ups to established businesses.

I have noticed a wide range of different business account offerings from the banks. What are the factors that I should take into consideration when identifying an account that is suitable for each company's needs?

A Banks offer various types of current accounts with different features to cater for the clients' requirements. Usually, a company's requirements and needs change as the business grows and it needs the current account features to be more complex and layered.

During the start-up phase of a business, the initial capital injection may range from low to moderate. Proceeds may not be immediate, depending on the nature of the business. Typically, the business owner will be the key person executing the majority of bank transactions.

Such a business may consider opening a current account with features such as a basic checking facility and a low minimum balance, so as to avoid incurring shortfall fees.

As the business grows, transaction activity and staff headcount may increase. There may then be a need for a current account with discounts on transaction charges and fees. Additionally, for ease of execution and reconciliation, products such as business debit cards, as well as Internet banking may help to better facilitate day-to-day operations.

Internet banking allows the business to monitor and make domestic and overseas payments online without having to queue at branches. This enables efficient cash flow management. Most banks allow the submission of payrolls as well as regulatory payments (Central Provident Fund, Inland Revenue Authority of Singapore) via Internet banking.

As the business matures, it would have accumulated cash reserves. Such a business may consider opening a current account with features such as interest bearing, which optimises returns on the account balances without compromising full liquidity should the need for cash flow arise. Accounts with this feature typically have a higher minimum balance requirement.

Effective cost management is an essential tool in today's competitive economic climate. As businesses scale up, it is essential to be mindful of transactional costs incurred that may compromise profit margins. It would be fruitful to discuss with your banker to find an appropriate current account for your company.

Mr Ian Teo, head of business banking, Standard Chartered Bank (Singapore).

• Do you have a question related to the running of your SME? Send your queries to Yasmine Yahya at

A version of this article appeared in the print edition of The Straits Times on September 14, 2016, with the headline 'SME clinic'. Print Edition | Subscribe