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Business Banking – The Best Business Bank Accounts For SMEs

When it comes to choosing the best business bank accounts, no longer is it as simple as going down to your local high street and choosing one of the high street banks. Small businesses, freelancers, contractors, and the self-employed have far greater options for selecting a home for their business money. These include an array of digital-only banks.

Whilst it is perfectly acceptable for a sole trader to use a personal account for their business money, some banks are not happy to let you. If you go ahead, you could run into problems with the small print. Having a separate account for your business income and expenses makes sense. Therefore, choosing a business bank account should be high on your to-do list.

Keeping finances separate – the benefits of business bank accounts

It can undoubtedly be more straightforward if your business transactions are separate from your home finances. This is especially so when it comes to identifying transactions, calculating business tax liabilities and working out business profit and loss, even as a sole trader. If you are a limited company or partnership, you will definitely need a business bank account to keep your company finances from personal spending.

Location

The type of bank account you choose for your business depends on what you want from the account. If you need an account where you pay in cash or cheques regularly, you may feel it is easier to choose a bank with a high street presence for ease of cash deposits. Many banks now offer cheque deposits through a banking app, although you may need to post the physical item for larger cheque values. Many banks and building societies offer business bank accounts that offer account control through apps. However, some still provide online banking portals, so you should think about ease of your for your main transaction types. Suppose your income arrives via bank transfer or online payment. In that case, a bank branch’s physical presence is less important. It can open up a more comprehensive range of business banking accounts, including some newer digital business banking providers.

Charges

You will likely face charges regularly to run a business bank account. Therefore, it’s vital to know your activity levels and transaction types to choose an account offering the best value. Fees vary between banks but generally include:

  • Monthly fees
  • Cash withdrawal/deposit fees
  • Transfers in and out
  • Cheques paid and received

There are also many incentives offered to get your businesses. Some can help lower or remove some of the expenses for the first few months after you open your account. Comparison sites have the most up-to-date details on the best value business bank accounts, including the latest offers and incentives. It’s best to spend some time checking out what is on offer before making your decision.

Accounting software integration

Many digital business banking providers and most high street banks offer easy syncing with accounting software packages to make accounting simplified and less demanding.

Borrowing with business bank accounts

Of course, choosing who you choose to build a business banking relationship with may also be driven by a need to borrow money. Even if it is not high on your priorities, it might be worth looking at the availability of small business loans from building societies and banks before settling on who will get your business.

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