Key benefits of a business bank account

A business bank account can make managing your company’s financial affairs more straightforward and efficient. We explain why it’s important to find the right one.

What is a business bank account?

A business bank account works like a personal bank account, but it’s designed specifically for managing a company’s finances. It handles business income and expenses, such as stock, equipment and wages. Business accounts often come with additional benefits that cater to the unique needs of businesses, rather than those typically associated with personal bank accounts. Both account types usually offer features like overdrafts and debit cards.

What are the benefits of a business bank account?

There are several advantages to having a business bank account – however, not every account offers every benefit. In light of these differences, it’s important to review what each account offers before choosing the business account you’d like to apply for. Or if you’re self-employed, whether you’d rather continue using your personal account.

Here’s a rundown of the features you may wish to consider when choosing a business bank account:

• Keeping personal and business finances separate – A business bank account makes it easier to keep tabs on your income and expenses, and to log your business expenses for tax purposes

• Free banking – Some business bank accounts are fee-free, although those with the best features tend to charge

• Tax software – Many offer a platform to link your bank account to accounting software, which can help when it comes to completing your tax returns

• Business management software – This enables you to generate invoices and upload receipts, as well as facilitate payroll, supplier and international payments

• Support – Phone lines and chatbots are available so you can speak to business experts from your bank if a problem arises

• Additional debit cards for employees –Each card can have its own limits

• Multi-currency capacity –This can make transactions with international clients easier

• Business credit score – With a business bank account, you can build your credit rating, making it easier to get better business credit cards and loans

• Perks – Depending on your card, you could earn air miles, cashback or discounts on spending with specified suppliers, money off hotels or free travel insurance

What are the disadvantages of a business bank account?

For all the pros, there are some cons to reflect on when considering a business bank account, including:

• Entry-level accounts – Although business bank accounts can offer significant overdrafts, you might be stuck with a limited account until you build up a decent credit rating

• Fees – Business bank accounts typically come with more fees than personal accounts. These can include monthly charges for using the account and transaction fees for withdrawals and purchases

• Branch access – Not all account providers have branches, which could be a problem if you regularly need to deposit cash or cheques

Read more...

• Do I need a business bank account?

• Business overdrafts explained

• How to manage cash flow