What you need to know about bank accounts Although not mandatory for sole traders, it is certainly advisable to have a separate bank account for your business transactions as this allows you much greater control over your finances. By maintaining a separate bank account, you will be able to introduce financial controls, such as bank reconciliations, and be better able to monitor your cashflow. Business bank accounts are much more flexible than they used to be and several banks now offer free banking, subject to terms and conditions. Type “free business banking” into Google to get a list of the latest offers. Another tip is to pay for items using a credit or debit card linked to your business account. If you were to lose a receipt, you could then prove to HMRC that the payment was to your usual supplier for business items, and therefore a genuine business cost. If the bank you choose does charge you, look carefully at what those charges are for and plan for them. For example, if you get charged every time you bank a cheque, try to convert your customers to paying you by BACs which is often free. If you are getting charged every time you go into overdraft, consider getting a bank loan which may give you a better rate and value for money. Do you have any recommendations as to banks to use or not to use for business?
Posted on: Sun, 23 Jun 2013 08:00:00 +0000
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