Why Have a Business Bank Account?

I was talking to our builder about the benefits of business bank accounts today, which made me think this might make a good topic for a post.

When I started up in business I used a second personal current account as my ‘business account’ for a while. Soon, though, I moved over to a free business bank account with Abbey. I now have a business account with Alliance and Leicester Commercial Bank which is free as long as you pay in £1000 each month AND pays a small amount of interest on credit balances.

Reasons to move to a business bank account:

  • Your personal account’s terms and conditions may actually preclude it being used for business.
  • If you are setting up a limited company or partnership you will have to have a separate business account.
  • You’ll need a business account if you want to take credit cards using a merchant account.
  • Setting up a busines bank account sooner rather than later is a good plan if you might do either of these things in the future.
  • It gives customers a better professional image of your business.
  • It helps you manage your finances. (You can have business current and deposit (savings) accounts so you can separate day to day expenses from money set aside for tax or VAT.)
  • If you choose a branch based account you may get helpful advice from the business banking manager.

I’ll look at choosing a business bank account next week, so let me know if you have any good or bad experiences to share.

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