Whether you run a restaurant, a clothing boutique, a consulting firm, or any other type of business,the right bank account can make your life easier. But the wrong account can cost you time and money. To make the most of your business banking experience, you need to choose your account carefully.

Consider starting your search by making a list of the features you need with your bank account. That may include the ability to write cheques and make wire transfers, but beyond those essentials, you may want to think about your future needs.

In particular, you may want to choose a bank that offers business loans and lines of credit. That way, if you need to apply for funding, you won’t have to restart the process.

Once you’ve honed in on the services you need, consider taking some time to compare the cost of different bank accounts. Some banks charge a monthly fee, while others charge per transaction, and still others use a combination of those two approaches.

If you don’t plan to use your account that often, you may qualify for a free or low-cost business bank account. For instance, at the time of writing, the Royal Bank of Canada offers a free small business e-account for low-volume customers who’re willing to handle most of their transactions online.

Keep in mind that you don’t necessarily have to choose a bank. You may want to look at credit unions. These not-for-profit financial institutions often offer lower rates than their bank competitors, and they tend to approve business loans more readily. As a result, they typically have higher customer satisfaction ratings, especially for micro-businesses with fewer than five employees.

Ideally, to stay organized, you need a business bank account that’s separate from your personal account. However, you don’t necessarily want to open your new business account at the same place where you have your personal accounts. Instead, give yourself some time to research your options and make sure that you’re choosing the best financial institution for your unique needs and your bottom line.

Choosing Between a Bank or Credit Union

A survey of more than 10,000 Canadian small business owners revealed that credit unions often outperformed banks in terms of providing the best overall financial services for entrepreneurs. Here are some of the relative advantages and disadvantages of banks compared to credit unions.

Advantages and Disadvantages of Banks

It’s important first to understand the basic structural differences between banks and credit unions. Banks are for-profit financial institutions with the primary goal of returning profits to shareholders. In contrast, a credit union is a not-for-profit institution, owned by its members and established for the primary purpose of providing its members with credit.

Banks typically provide a much fuller range of financial services, including things like brokerage accounts. They also tend to offer easier accessibility, with most banks having many more locations and ATMs than credit unions, which typically serve only a small region.

Therefore, it’s important to consider the particular needs and operational scope of your small business. As of 2016, credit unions were most prominent in Western and Atlantic Canada, although recent regulatory changes enable them to expand beyond provincial borders and operate nationally.

A primary disadvantage of banks is that most customers report that banks generally charge higher fees than credit unions, and offer lower interest rates on interest-bearing accounts.

Advantages and Disadvantages of Credit Unions

Among the main advantages credit unions offer is the fact that credit unions tend to be easier sources for a loan. Many small business owners report that credit unions are more willing than banks to consider a broad range of factors, such as the performance of their small business, making credit more readily available.

Other advantages, already noted, include their typically lower banking fees and the fact that they may offer significantly higher interest earnings on interest-bearing accounts. Plus, many customers report that credit unions just seem friendlier overall than banks. They usually rate higher than banks on customer satisfaction surveys.

Disadvantages of credit unions mirror the advantages banks offer a wider range of financial services and better geographical coverage, making them more convenient if your small business has locations in several regions. If your small business needs high-end business services such as foreign exchange services, a major bank may be your best choice.

Making Your Finances Easier

One factor in your decision may be the ease of connecting your bank accounts with your accounting software, so check to see if your bank or credit union offers this service. Most financial institutions do, and new small business accountants and bookkeepers appreciate the convenience of being able to download and easily match all business financial transactions with online accounting software such as QuickBooks Online.

Once your banking and credit card accounts are connected to QuickBooks Online, it’s a quick and easy process to log, match, and categorize all your financial transactions. This helps save time and ensures better accuracy in your financial record keeping.