When running an SME, banking issues should be at the top of your concerns. SMEs already have enough challenges like securing funding and cash flow management, among others. One of the best ways to solve some of these is having a bank account for your business. The question is, should the banking be online or the traditional brick-and-motor?

I believe there are advantages of online banking for SMEs that many business owners do not think about, but should consider. With the current pandemic, this could be the right time to take your business’s banking online.

Advantages of Online Banking for SMEs


Online banking is more convenient than the traditional brick-and-motor banking system. All you need is access to the internet, and a mobile or computer device and you are good to go.

You can check your account balance and do all your payment transactions online from anywhere at any time, without setting foot at the physical branch.

Such convenience saves you the time and energy you would use going to a physical bank and tolerating the long queues.

Online banking also reduces paperwork. Banks usually send user statement in soft copy, which are mostly password-protected for security purposes.

Cash flow management

From experience, I find it easier to manage a company’s cash flow with online banking. If your business has more than one account, you can always tell where the money is and easily move money across accounts to meet your business needs.

Also, many banks in Kenya offer excellent customer support and designated relationship managers for businesses that you can reach out to for help.

Cheques are cumbersome and hard to keep track of compared to electronic payments. Unless you are always trading with Post Dated Cheques, it is not easy managing when your client will cash the cheque. Also, cheques get lost and mishandled, with some rips here and unwanted writings there, meaning the bank will not honour it.

Dealing with cheques means leaving a certain balance in your account to cater for these cheque payments and avoid bouncing cheques. This money could go into other urgent uses rather than sitting in the account waiting for your client to cash the cheque.

A bounced cheque will cost you money for bank charges, not forgetting it is illegal in most countries and can land you into trouble with the authorities if your client files for criminal charges.

However, with online banking, you can load the payments online and pay immediately or schedule the payment for later when the account has money. These payments are also instant, compared to cheque payments that take two business days or longer to clear and for your bank balance to update.

Simplifying bookkeeping

A major challenge that many SMEs face is bookkeeping and online banking makes it easier compared to dealing with a hard copy bank statement and cheque payments. If your business has many transactions, manual entry of these transactions is a laborious task that ends up wasting your business’s time and staff’s energy.

Some banks have advanced systems that you can integrate with your company’s accounting software. You can further customize how often you need the account statement to be uploaded to your accounting software. It simplifies the accounting, reconciliations, and cash flow management process of your business further.

Read more on the advantages of online accounting software for SMEs

User customization

Delegating banking issues can help you focus your time and energy on other matters, like running of the business. For example, you can give your accountant access to the bank and make it easier for them to make payments and reconciliations.

While it is risky, you can customize on the level of information and usability that your accountant or any other person has access to. Additionally, you can input signatory levels to ensure that any payments made from your accounts require your online authorization for the bank to release the funds.

That way, you are always aware of what payments happen and when they do happen, without having to do the manual work of loading the payments yourself.

Traditional brick-and-mortar banks offer some level of personalized services with face-to-face interaction. However, there are advantages of online banking for SMEs that can benefit your business. Take some time to think about your business’s needs and wants, the costs involved and consider whether it is time to take your company’s banking online.

Disclosure: The information provided to my readers is genuine and precise to the best of my knowledge. The links provided in this article do not belong to any affiliate partners and I am not paid for them.

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