Do I need a Business Bank Account?

Jun 4, 2024

When starting a business, you might wonder if you need a separate business bank account or if you can use your personal account. Here’s what you need to know:

Who Needs a Business Bank Account?

  • Sole Traders: Technically, you don't have to open a separate business bank account if you're a sole trader. However, it’s highly recommended to do so.

  • Other Business Structures: If your business is set up as a company or another type of entity, you must have a separate business bank account. This is because your company is a separate legal entity and needs its own account.

Benefits of a Business Bank Account

Even though setting up a business bank account involves some extra admin, it can save you time and money in the long run. Here’s why:

  1. Simplifies Taxes: A separate business account helps you clearly see your business finances. It avoids the hassle of sorting through personal and business transactions, which can save you and your accountant a lot of time and reduce the risk of missing tax deductions.

  2. Shows Professionalism: Having a business bank account adds professionalism to your business. It builds trust with customers and helps promote your brand, especially if your account displays your business name.

  3. Supports Future Growth: A business account can make it easier to get funding, loans, or credit as your business grows. It also simplifies handling finances when dealing with potential investors or lenders.

  4. Tracks Financial Performance: Linking your business bank account to cloud-based accounting software (like FreeAgent) helps you track your financial performance more easily.

  5. Free Accounts: Many of our clients get free business bank accounts. Give us a call to see if we can help you find one.

Who Are Kernow Accountancy?

Kernow Accountancy is a family-run business that uses advanced technology to support your company. Our team of accountants and bookkeepers handles your finances so you can focus on growing your business.