Open a bank account
How and why you should do it
Once you're up and running you’ll need somewhere to hoard your cash.
Limited Company
Sole Trader
Limited companies are required to separate accounts in the company name as the cash belongs to the company and not the director.
As a sole trader you could use the same bank account for personal and business but this makes it much more time consuming and difficult down the line to figure out which transactions to use when preparing your business' income statement.

Can I use a personal account for my business?

Technically yes, but it will be against the terms of most banking providers - it is not worth the hassle of risking your funds being frozen for any amount of time due to a breach of terms. Set up a business account and save yourself this risk and also benefit from having your banking separate.

What should I look for in a business account?

There are many aspects to what makes a good banking partner. These days all will sync up with your bookkeeping solution easily (some bank make a big deal of marketing this), however, only a few will let you open an account online. For a standard new ecommerce business, the key three things to look for are:

Low charges

Most accounts charge a monthly fee as well as ongoing costs for transactions. Shop around to understand which would be most cost effective for your business.

Cost of foreign transactions

If you are dealing in currencies other than GBP, get a bank account that can handle other currencies and who does not charge the moon and the earth for this. TransferWise Transferwise, Payoneer, and WorldFirst are the top three providers in this arena. Read our detailed FX partner blog post on the topic if this applies to you.

Set up time

Currently the set up time can vary substantially from weeks to months with some of the high street banks. Enquire about this when you first get in touch with each bank.

Which banking providers do we recommend?

We recommend Tide for anyone looking for a UK GBP account, and for anyone operating in multiple currencies, we would typically suggest any of the three FX partners mentioned above. TransferWise is the most popular amongst start ups due to quick and online set up, as well as no monthly fee.
Last modified 9mo ago