Table of contents
Table of contents
If you’re a business owner, a business bank account is your best friend, giving you a means by which to separate your business and personal finances.
Not only is this beneficial to your general sanity, but it’s essential for efficient bookkeeping. And if you’re a limited company or an LLP it’s a legal requirement anyway, so you have no choice. Sorry.
In this article we’ll go over how to set up your business bank account, and some of the best ones currently available for small businesses.
There are generally two ways to set up a business bank account.
There’s the traditional way, where you wander into an established ‘brick-and-mortar’ bank on the high street, and there are online-only banks. Like everything in life, each option has potential pros and cons depending on what you need.
For example, opening a business bank account on the high street usually means you’ll need to wait for an appointment with someone, whereas an online bank is designed to streamline the process so you can just crack on and do your thing.
This can be a bit general though, because most high-street banks now offer online services too, so it’s all about finding the right one for your business based on your own situation.
To help you decide, we’ve compiled a list of our top five bank accounts for small UK businesses.
It really does depend on your own unique situation, and which bank best fits your needs.
For example, if you already know you’ll be travelling a lot, then it makes the most sense to go with Revolut, which facilitates international business.
Or, if you’re worried about your cash flow, HSBC is probably the answer, what with its kinetic account specifically designed to help with this.
You can also choose to mix and match, as it’s true that each bank offers something different, or specialises in a particular area.
Another option is to look at software options which you can use alongside your bank account to iron out some of the issues you might be trying to work around. For instance, some accounting software will include a multiple currencies feature to calculate currency fluctuations rather than relying on your bank account alone.
In terms of payment handling, you might also look at Wish, which specialises in supporting businesses that operate internationally, and PayPal, which can be used with ecommerce sites (e.g. eBay), as well as accounting software.
Established in 2015, Tide is all about providing great customer service to business bank account holders. This approach is quite different from most traditional banks, who often prioritise personal accounts over those owned by businesses.
You can also integrate Tide with your accounting software of choice, which helps keep you records up-to-date with less effort. It makes it considerably easier to track your spending.
The cost is based on a variable rate, depending on the exact services you need.
Starling is another online bank, and was founded in 2014. It prides itself on its friendly user experience, offering round-the-clock support from real people online.
Like Tide, Starling is compatible with accounting software, and it also includes spending analytics to give you a full picture of your finances.
You can create a business account for free, but will be limited to the most basic sole trader package unless you choose to upgrade.
You’ve probably heard of this one before (we’re majorly concerned if you haven’t). Barclays is one of the Big 4 banks in the UK, traceable back to 1690.
This experience means it’s able to provide expert financial advice, which will only help your business in the long run. It also offers 24/7 online support, so you can get help no matter where you are or what time of the day (or night) it is.
In terms of cost, it’s free for the first year as long as you don’t already have a business bank account.
Another bank you’ll no doubt be familiar with, HSBC runs the proverbial gamut, offering specialised accounts for all business types: startups, small businesses, and larger business bank accounts.
It’s a good choice for those looking to start a business, as sole traders are granted access to HSBC’s Kinetic Current Account, which seeks to resolve the usual cash flow issues encountered by startups.
Your cash flow is also helped by the fact that the first year is completely free.
On top of all this, you can use your HSBC business account alongside other accounting software, meaning everything is in one place.
The so-called new kid on the block, Revolut has quickly become a favourite among small business owners, thanks in part to its easy setup and low fees.
Another big plus is that Revolut supports multiple currencies, so you won’t need to worry about exchange rates and the like if you ever find yourself doing business internationally.
Like some of the other banks mentioned, it allows smooth integration with accounting software, and you also get daily interest on your savings at good rates.
With all this in mind, Revolut emerges as the go-to bank for small business owners looking to scale their business quickly and with as little fuss as possible.
Learn more about using Pandle to make business accounting easier. Create an account today and decide what to do with all the extra time you get back.
A content writer who enjoys writing in a way that’s fun and engaging, while still being informative and useful to everyday people. I also enjoy writing creatively.
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