Banking in business
Banking is an essential part of most business operations as it allows transactions between the customer and the business itself. In this light, many banks have made it easier for businesses to interact with their clients in this financial business aspect through business accounts. These accounts hold the name of the business being transacted with, thus allowing for this interaction between business and client.
Can a personal account be used for businesses?
In most cases, only sole traders may be allowed to use their personal bank accounts for businesses. Some banks even go as far as stating in their terms and conditions that individual accounts can only be used for personal use and should not double as business accounts. However, in most cases this depends on the type of business you run and the lenience of your bank. Limited companies are required legally to have business accounts, as they are separate legal entities from the owner and directors of the company.
Benefits of a business account
– It appears more professional if clients make their payments to a business name ,rather than a personal name.
– It helps you build up your credit history with your bank, making it easier to apply for a business loan or a credit card in the long run.
– Banks tend to offer those with business accounts extra support such as online tools to help with invoicing and accounting.
– With a business current account, you can easily track your company’s finances and calculate taxes you may owe when submitting your tax returns.
– several banks support your company during it’s early days by offering free banking introductory periods, for example 18 months free banking.
How to switch to a business account
It is possible to switch from a personal current account to a business account in a space of 7 days as you are covered by a switch guarantee for the same amount of days. The benefits, charges and types of accounts differ according to bank, so it is wise to compare what each bank offers so as to choose one that best fits your needs. It is advantageous to have the following information readily available to speed up the process of switching:
– your company’s House Registration Number, if your company has one.
– details about your businesses income ,turnover and capital.
– the names, dates of birth and addresses of all directors or partners.
– proof of identity, be it a passport of drivers license.
– proof of residence.
With most banks that offer business accounts, a small fee is paid by the business when any transaction occurs. These transactions may include deposits, withdrawals, writing cheques and the like. Some banks also offer accounting services to business account holders, financial and business management advice, and competitive exchange rates for their business account holders. This allows for businesses, especially those in their start up stage, to grow and receive the recognition it deserves from investors and the public at large.