Last Updated on June 15, 2024 by admin
Handling finances is without doubt the toughest thing when it comes to business and to maximise your company’s profit, you need to open a bank account.
In the UK, for limited companies, it is highly recommended to open a business account, however, freelancers and self-employed persons have the liberty of either opening an account or operating from their personal bank account.
Opening a bank account may be overlooked by sole traders but dedicating a bank account for your business has a lot of advantages.
In this article, we will explore the advantages of having a business bank account and how you can significantly simplify your daily financial operations by opening one.
What are the benefits of opening a UK business bank account?
Easier financial organisation: A business bank account gives you a great opportunity for the separation of your personal and business expenses. You will have the ability to separate your business and personal transactions unlike mixing everything bringing about confusion.
Professional image: A business account gives your business a more professional appearance. Customers and clients prefer to transact with an organisation that has a financial setup.
Tax Management: With a business bank account, you can easily track business-related transactions, for an easier tax preparation process. The business owner will not be confused as to where money is spent and which ones can be written off to the business.
Expansion in operations: A business account not only brings about ease in operation but also enables you to have access to loans and credit services. Finances services among others could be your catalyst for growth.
Building business credit rating: In addition, a business bank account plays a big role in establishing your company’s credit rating. This credit record that you keep eventually comes in handy when you are seeking a business loan or other credit solutions.
Dedicated business tools: Although personal and business accounts sometimes have similar features, some of the best business accounts provide additional features that cater to small companies and self-employed individuals. The features may include business account or invoicing services, integration with the existing software, and tools for expenses and payments management. If you are an international company, a business account can facilitate cross-border transactions.
Expense Tracking: With a business account, you can easily track your business expenses. These applications are not only intuitive but also available in the form of web applications or mobile apps that can categorise transactions automatically. Having this capability takes away the guesswork and lets you recognise how and where exactly you spent your money and find areas that could be optimised.
Financial protection: A separate business account will help protect your assets in case of a legal issue or financial disputes emanating from your business. In case of insolvency, your funds will not be touched.
Networking and partnerships: Some banks provide facilities for networking and business alliances. With a business account, you get a chance to attend special events, workshops, and seminars.
What to look out for when choosing a business bank account?
Now that you know the benefits of opening a business bank account, it’s time to understand what to consider when choosing a bank for your business.
Fees:
You should also consider the fee charges offered by the banks. Some banks charge surprising hidden fees that can take a toll on your finances, so it is better to do your research before settling for a bank.
However, there are fees you might have to consider such as ATM fees. Also, if you are looking for additional features for your bank account, you will automatically have to pay a small monthly fee.
Customer service:
Customer services and facilities offered by banks, such as online and mobile banking can be important factors to consider when choosing a bank.
Limit:
Some business bank accounts have a limit on the number of transactions you can do either in a day or monthly. It is important to check which bank rhymes with your business transactions to offer your business a seamless experience.
Perks:
Some business bank accounts may come with perks that might be useful to your company. However, some of those perks might need additional fees.
If you open a UK bank account for your business with BusinAssist, you can get up to £70 cash reward for both UK and non-UK residents. When you incorporate a UK limited company with us, you will get a referral to open a bank account for free and get gifts and cash rewards totaling approximately £150. Click Here for more information.
Services:
Choosing a bank with services that meet the needs of your business. If you are a non-UK resident and want to incorporate a UK limited company, then it is good to choose an online bank that provides an array of necessary facilities for clients of international origin.
In the UK, there are two main types of banks: traditional banks (also known as high street banks) and online banks / virtual banks.
High street banks refer to major retail banks that have a physical presence on the high streets of towns and cities in the UK while an online bank operates over the internet.
High street banks may have an online platform but they may require one or all company directors (according to the bank’s discretion) to travel to the UK to open an account, meet with a bank representative, and present relevant documents. This makes it difficult for people who want to purely operate their business virtually without the need to travel to the UK.
How to open a UK business bank account online
After the considerations to look out for, it’s time to open a business bank account. Here are the steps to help you open an online business bank account wherever you are.
- Choose a bank that suits your business
- Have all the necessary documents such as:
- Proof of ID for all company directors – National Identity Card, passport, or driving license.
- Proof of address- utility bills, bank statements, or tax statements.
- Business address
- Contact details
- Company registration number
- Estimated annual turnover proof of identity, and contact information.
- Visit the bank’s website and start the application process.
- Fill out all the forms and attach all the requirements accurately.
- Examine the application form before submitting it.
- Await approval.
Once approved, the banks provide UK account details, sort codes, IBANS, and virtual and physical bank cards.
In conclusion, having a UK bank account for your business is a good idea to streamline your finances for all business structures. It comes with an array of benefits from keeping your finances separate from your assets to helping you manage and improve cash flow.
You can apply for a UK and international multi currency bank account in minutes with BusinAssist. Simply visit our website and apply in minutes. If you are starting a new company, we can help you incorporate it and open a business bank account for free once you start trading. For more information contact us at [email protected].
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