How do we bank as a distributed company and how you should do it too

This is not a paid endorsement by any service provider by all means. 

Our company, Anywhere Consulting is a distributed business. It means that we do business without borders. Our legal entity is based in Estonia but our team is global. However, how do we bank, what service provider do we use, and why you should use the same too? In short, we use Revolut Business for our business banking, and I opened one of my personal accounts at Revolut as well.

The problem with traditional business bank accounts

The question isn't about business bank accounts but with all traditional banks. I have used several banks for business and personal reasons from HSBC to ERSTE and others. I had the same problem with all, no matter which country they are based in.

1. Weak, I mean amazingly lousy customer service

No matter if they have nice people on their team, the fundamental foundation of their customer service is broken. Usually it has to do with the customer service issue timeline: I have a problem -- I email them or message them over their online platform where I logged in -- they tell me I have to call them as my question is extraordinary (every problem is) -- over the phone I encounter a phone-bot or dial-monster, and it takes endless minutes until I get a human over the line -- at this point, they either solve my problem after I have provided them with a bunch of ID numbers and cut through an overcomplicated verification process OR they tell me that my question can be done only offline -- I have to go to the branch. On foot. Personally. During business hours. Also, their phone line is live during their indicated business hours. Oh, and they answer emails within 31 days.

I know it sounds harsh but it's 2018. There's a thing called the internet and customer services run on instant messages. Exclusively. No phone and no "come to our branch." I understand that there are situations and type of businesses that need severe verifications, but I'm a small business or sole-entrepreneur, I don't deal with zillions. I need someone to help me with the issue of my poor tiny business debit card. 

See my point? Get the feeling? Meanwhile, Revolut offers 24/7 customer service over instant messages on your mobile or desktop, no matter which time zone you are in. I tried it. They are super helpful, quick and excellent.

2. Hidden fees and bad rates

Of course, there's a thing called free account everywhere. However, there are loads of hidden fees even if your account is labeled free. Also, some banks charge you a small amount just because you are their client. Yeah, I don't get it either. However, let's say you have a free account. It means, your business debit card is not free, there should be an annual rate for that. Also, I'm not talking about credit cards, but only about simple debit cards. Also, there are countries where the government applies a special rate on every bank transfers called transfer tax or something like that.

However, let's say you are one of the lucky few who has a free account with free cards. Your bank will undoubtedly charge you amazingly bad rates for exchanges. I own a distributed business, and my clients are from all over the world with their currencies (mainly EUR, USD, and GBP). In a traditional bank, this means three separate accounts. Alternatively, you have one account, and you pay for exchange rates. I've done a calculation before on my banking fees - traditional bank, a big one in the UK - and I lost around 2-5% of my company's revenue just on banking fees / lousy exchange rates. 

Meanwhile, at Revolut Business, I hold many currencies in separate accounts, and if I want to exchange, I get interbank FX rates. I also pay a simple fee for the Business account. It comes with almost unlimited physical business cards where I have to pay a one-off cost on mailing it to me, and I have an infinite amount of virtual cards for free which I can use for stuff purchased online (most of the things I buy to my business is purchased online).

 
 

3. It's just a bank...

When it comes to managing your business, a simple service can save much time for you. When it comes to business banking, there are a few things that can be done with a bare minimum and there are things that can be added as an extra.

The bare minimum is to have a user-friendly internet banking platform. You can't imagine how many banks fail to comply with this expectation. They are bulky, overcomplicated and super-slow. Not to mention they look ugly. The bare minimum is the option where you can download annual transactions for your accounting, or you can merely hook up your bank details with accounting software for your accountant. Many banks are just incapable of achieving this.

Extra features can save you time. These services may include: helping with managing company expenses, a hand for your accountant or just merely a cash flow management system that tracks your costs in an easy-to-understand method. Revolut offers simple expense tracking, all employees can get a business debit card, and all cards are managed and monitored from a simple dashboard. Clearing invoices and requesting payment is also simple to do. Other service providers like Holvi, they integrate basic accounting into their offerings for clients.

There are other new and hot players in this field apart from Revolut. To name a few: N26, Holvi, and Transferwise, the latter is currently rolling out its new debit cards for Borderless Business customers. All of these can be opened entirely online, but you need to verify your business and yourself -- which is straight-forward and easy. Sadly, the majority of people don't know about these alternatives and still bank with traditional institutions. I get it: when you are a bigger company, you need other banking services like business loans and company credits, plus you need a physical bank where you keep your funds intact. However, for small distributed businesses generating less than 1 million USD in revenue annually, new emerging financial technology service providers are a must to try.

 

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