When starting a company it is normally advisable to open a separate business bank account for processing your business transactions. This will make reconciling payments easier and will keep a clear divide between your personal money and the business money.
Other business will also expect to pay your business name and not you personally. When making payments to your suppliers it is more professional to transfer funds from a business account.
Most high street banks in the UK offer a period of free banking for nearly all businesses. Some accounts are free for life depending on your banking needs.
Which business account should I choose?
There is a good selection of banks offering accounts to businesses. The better accounts provide an initial period of free banking for at least twelve to eighteen months and sometimes longer. It is important to read the small print tough to check exactly what is covered by the free banking. Check for transaction limits on how much cash you can deposit over the counter free of charge. Others may put limits on how many cheques you can deposit or make payment with per month. If you go beyond the limits there may be administration charges to pay.
It is also worth considering the interest rate paid on any finds you hold in the account. If your business is likely to keep a good reserve of cash in a bank account then shop around for the best interest rate you can get. Free banking is not that great if you are losing out on interest on your savings.
Assess the available business accounts until you find one that best fits the way you operate your business. Do you need to deposit cash? Do you need a good interest rate?
Small Firms Services currently offer bank account referrals with Barclays for customers looking for a high street account. Alternatively, we can offer a no credit check account option if this is more suitable for you.