How a business account can help you achieve your ambitions
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It’s estimated that as many as 75% of the UK’s self-employed workforce use personal bank accounts for all their business transactions. Perhaps you’re one of them? Has your side-hustle grown into a full-time business, or did you start using your personal account without really thinking about how your business might change? Whatever your reason for using your personal account, there are lots of ways you can benefit from switching to a business account.
Please remember, using a personal account for business use is in breach of our terms and conditions.
Be more efficient
Freelancers and sole traders lose 15 days of paid work a year, spending two hours each week sorting business expenses from their personal bank accounts. That’s 15 days you could be being paid for your work. With a business account you can:
- Automatically keep your business income and expenditure separate from any non-business income and personal expenses.
- Quickly provide information to your bank when you’re applying for credit.
- Find the right information easily for HMRC to calculate your accurate tax bill.
Build a business credit profile
Over the last 12 months the Bounce Back Loan Scheme (BBLS) has helped more than 1.5 million small businesses affected by the pandemic. In 2019, 58% of small and medium sized businesses were using some form of finance and using a business account can give you a better chance of being accepted for the type of credit you need to help you manage and grow your business. A business account will help you:
- Provide consistent and transparent information about your trading history.
- Show you have a legally trading business.
- Show how promptly you make payments for services, and how well you manage your business finances.
Budgeting and forecasting
Having a grasp of cash flow really is one of the main things you should have as a business owner, but many don’t bother trying to forecast it. Some feel it’s simply too difficult to do. Having a business account can make it easier to spot trends in your income and expenditure more clearly, showing you:
- How quickly your customers are paying their invoices. In 2022, SMEs were owed on average an estimated £22,000 in late payments.
- If your income and expenditure changes seasonally, helping you plan for times when there might be more money going out of the business than coming in.
- When you might need some financial support through a loan, overdraft or simply by spreading the cost of larger expenses.
Be more credible
Portraying the right professional image of you and your business is one of the main ways you can be both different from your competitors and give confidence to your customers. A business account means:
- Customers will have the confidence they’re paying a real business for goods and services, especially important with the rise of fraud and scams.
- You can offer your customers a range of ways to pay you by linking the right type of merchant services to your account.
- You might be eligible for other forms of financial support for your business such as grants, which will usually only be paid into a business account.
Access the right support at the right time
It might sound obvious, but by having a business account we’ll know you run a business. As research has found that businesses that seek and engage external help are more likely to grow this means:
- You can talk to a Business Banking Manager about your business. They can’t give you advice, but they can talk through possible product solutions or signpost you to other organisations that could help you.
- You could get the right type of help when you need it most, and we’ll make you aware of the range of support we can offer you and your business.
- You’re best prepared for when the unexpected happens and you quickly need financial help or advice, from either your bank, a business support organisation or other funder.
Please remember, using a personal account for business use is in breach of our terms and conditions.
Next steps? Find out more about our business accounts.