A Beginners Guide to... Opening a Business Bank Account with Tide Bank

We've partnered with Tide Bank to give you a run down of everything you should consider before opening a business bank account.

As a business owner, organising your finances is an essential task but one that can often feel overwhelming. There are countless decisions to be made, and choosing whether or not you should open a business bank account may be high up in your priorities. In this blog, we will break down the various factors to consider before you choose which account and provider is best for your business.

Why open a business account?

If you’re in the initial stages of organising your finances and are still on the fence about whether you should open a business bank account, here are some ways you could benefit from one:

Keep personal and business finances separate

  • For Ltd. companies, it’s a legal requirement to keep your personal and business finances separate, and is seen as best practice for self-employed people too. You cannot manage the money for your business through a personal account, but it’s also good to keep things separate so that filing your taxes each year is a lot easier. Intertwining the two can also lead to more problems down the line, such as concerns around liability and being unable to track expenses.

Added protection

  • Business accounts offer more personal liability protection, and many also offer purchase protection and ensure that business information is securely stored.

Easily track business growth

  • Having your business finances and expenses in one account makes it much easier to track your profits and business growth over a set period of time, so that you can clearly see if you’re on the right path.

Professionalism

  • Having a business account increases the professional feel of your business. Customers can send payments directly to the business, and employees can handle everyday banking on behalf of you if needed.

What are your business needs?

When opening an account, you should consider what the main purpose of that account will be. Do you need a current account for cheques, deposits and spending? Or would a business savings account be more suitable? Perhaps you need an account specifically for loans, or all of these combined. Keep these in mind when talking to account providers, as they will be able to guide you in the right direction towards the type of account that is the best fit for you and your business.

What information do I need?

In order to set up an account, there are several pieces of information and documents you will need about you and your business. Different banking providers require different levels of information, but the list below is industry standard:

  • Full business address and postcode- This can be a home address if you run your business from home.

  • Contact details – Landline and mobile numbers and email addresses.

  • Companies house registration number, if applicable.

  • Approximate annual turnover

  • Account number – if setting up a business account with a bank you already have a current account with

  • About partners and directors:

    • Full names and dates of birth
    • Proof of identity – such as a driving license, passport, or national ID
    • Proof of personal address – you’ll also need your previous address if you’ve been at your current one for less than three years

How to choose your banking provider

Old or new?

  • Do you want to stick to the same bank that supplies your personal accounts, in order to maintain a good client/bank relationship and keep up a rapport?
  • Or, would you like to experience a new bank provider? Many modern business-oriented banks operate online and can provide more advanced business features because of this.
  • Most business-focused banks provide payroll and employee features as standard, but with online providers such as Tide you can schedule payments, upload and auto-match receipts, deposit cash at the post office and auto categorise your finances in the app. Tide are one of the fastest-growing business banking platforms in the UK today. By opening a Tide account (powered by Clearnbank), you can unlock a host of features & benefits to better manage your financial admin. What’s more, they have an excellent online customer support in place should you ever need a helping hand. A viable option for those who want a more modern, streamlined banking experience.

What Incentives do they offer?

Keep an eye out for each bank’s unique incentives. Many offer discounts, lower fees, and emergency credit. Think about what incentives you would prioritise most and use this to help you decide the right provider for you. Tide are offering Auderli customers £50 cashback and 1 year of free transfers.

Fees

All business accounts incur certain fees that personal accounts do not. These include transaction, AVS fees (address verification system), minimum balance fees and early termination fees. Take a look at these when choosing your bank, think about which fees you would have to pay more often, and go for the bank with the lowest cost in this area.

Do their goals align with yours?

A good way to determine whether a bank is a good fit is to read reviews and find out the experiences of people in similar businesses to yours. That way you know whether the bank works well with your particular type of business, and how they fare with customer support in the long run.

Convenience

Since your business account will be used on an almost daily basis, it’s important to consider how convenient each bank will be for you. For example, are there ATMs nearby? Or if they are based online, can you still deposit cash and cheques easily? Are there mobile and app banking options and a reliable customer support system in place? All of these elements are important for increasing the likelihood of you sticking with the bank that you choose, so it’s better to understand these factors before committing to one provider.

So, there you go! Hopefully you now feel a little more prepared to open up a business account and make an educated decision on which type you need and which provider is best for your business. Once you have opened your account, you can keep all of your business documents and finances organised even more through Auderli, the new life management app where you can upload store and share important information in a digital filing system.