Are your business finances on track?

Our Relationship Manager offers her take on higher interest rates, saving pots and financial health checks.

For Maddie Holmes, a Relationship Manager at the bank, based in the North of England, the 500 plus business customers that she looks after are starting to take note of today’s higher interest rates. She points out that for years interest rates were low but now they’ve become more engaging businesses are reconsidering their options.

“Cash will be a tie when you first begin your start-up journey but, for an established business, being able to separate savings goals can work,” she explains. “I’ve got customers that have done this; they might put some money in the tax account pot because that’s a more efficient way of saving.

“Different pots with different maturities or notice periods can work well: you could have this cash in an instant [account], this savings pot in a 35-day, this in a 95-day, particularly for businesses that know when they’ve planned to spend the money. 

Growing your savings to grow your business

Common reasons to save:

  • Purpose-driven savings, so for tax and quarterly VAT returns
  • Reinvestment such as staff training, new product development, store refits, marketing strategies, digital adoption
  • Emergency funds or saving for a rainy day as security for the business and to help manage cash
  • Saving to earn interest
  • To bolster cash flow

Economic shocks have made businesses more cautious with their money in recent years. “Cash is king and having savings is important, but some businesses won’t necessarily have an in-house accountant or a bookkeeper – running their business will be their priority.”

For this reason they might have a projection of what the next quarter will look like but perhaps not much past that, she says. Business owners are busy and might believe that if they don't move money from a current account, then they’re not worrying about it every day. “They might not be earning any interest but they’re also not worrying that something won’t be paid, so it’s peace of mind.”

A financial review could help you stay on track

It’s important to have conversations where businesses are thinking about their money, reflects Maddie. What do you do? What are your plans? What are you doing with your money?

As we’ve seen, a lot can change in a year – such as interest rates and hikes in inflation – so it can make sense for business customers to carry out regular, free financial health checks*. “There’s usually something in there that the client might benefit from. It’s very rare that everything is already in place. It’s another level of thinking that can be tailored to your business and tackle areas of risk like how to protect your employees, for example,” she says.

It’s designed in such a way that managers simply start chatting about their business and then you match up their priorities and goals, says Maddie. “There’s a whole holistic approach to the format of how customers start talking about their business, it’s about how you can help that business to grow and to make sure they’ve got everything protected, and are in a position to spot future opportunities. The businesses that do the reviews get more out of the bank than the time spent doing the review.”

Looking to the future

Part of this holistic approach is based around protecting finances but “as well as asking about base rates, businesses are also keen to know more about predictions or events in their industry”. For a lot of businesses, it’s about looking ahead and it can be helpful to drill down to shifts and trends within their particular sector.


Learn more about financial wellbeing.

*Financial health checks are free to Business Banking customers.

This material is published by NatWest Group plc (“NatWest Group”), for information purposes only and should not be regarded as providing any specific advice. Recipients should make their own independent evaluation of this information and no action should be taken, solely relying on it. This material should not be reproduced or disclosed without our consent. It is not intended for distribution in any jurisdiction in which this would be prohibited. Whilst this information is believed to be reliable, it has not been independently verified by NatWest Group and NatWest Group makes no representation or warranty (express or implied) of any kind, as regards the accuracy or completeness of this information, nor does it accept any responsibility or liability for any loss or damage arising in any way from any use made of or reliance placed on, this information. Unless otherwise stated, any views, forecasts, or estimates are solely those of NatWest Group, as of this date and are subject to change without notice. Copyright © NatWest Group. All rights reserved.

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