Why Banks Aren’t Meeting the Needs of Small Businesses

Many people operate small businesses with just a few employees or work by themselves as freelancers. These people do not have traditional accounts because traditionally people open up accounts with traditional banks only after becoming self-employed. If these people already have a business account or if they are looking for one, it is important for them to understand why traditional banks do not work hard enough for these entrepreneurs.

1) Traditional bank accounts

Traditional bank accounts may seem like an attractive choice for small businesses, but they can have drawbacks. For example, some traditional banks fail accounts payable and receivableto accommodate small business needs in terms of . Other traditional banks aren’t equipped with expense management systems that save time and money for smaller companies. With less than $1 million in annual revenue, it doesn’t make sense to give your money to a large bank.

2) Expense management systems

Traditional banks don’t work hard enough for small businesses because they don’t have systems in place to provide customized solutions. When a business is starting out, it needs a lot more than just an account with a few hundred dollars in it. Instead, banks should provide expense management systems that handle all aspects of a small business’ finances under one umbrella and which can grow as your business grows. That way, you won’t end up stuck having to change banks every time you want something more; you’ll be able to stay put and expand your services naturally.

3) Accounts payable

It should come as no surprise that small businesses need accounting solutions just like larger corporations do. The challenge is, many banks don’t think small business customers are worth their time, and thus provide poor solutions for small business accounting needs. In fact, as a recent report reveals, traditional bank offerings—including credit card services and expense management systems—often don’t work hard enough to help small businesses succeed. This is concerning because, when it comes to entrepreneurship, they are an important part of our economy. While America has created nearly 13 million new businesses over the past 15 years, two-thirds were started by someone who was self-employed or worked with family. They play an outsized role in job creation; each new business can be expected to create 4-5 jobs on average during its first year.

Conclusion

In short, traditional banks seem to be stuck in old ways that prevent them from better meeting small business owners’ needs. Because these banks don’t really know small businesses or have a vested interest in their success, it can be hard for these firms to work as hard as they could to meet small business owners’ needs. That seems like a problem—and it is—but there are solutions on the horizon.

SOURCE:Why Traditional Banks Don’t Work Hard Enough for Small Businesses?