Business Banking

At an early stage, your only interest should be to create a facility where you can pay in cheques and withdraw money. Once your business has taken off you can look for a higher interest account where all the excess money you will accumulate can be stored.

If you are a sole trader you can open an account that will have your name and trading style, for example, Joe Bloggs T/A Bloggs Business Services (T/A means 'trading as'). This gives you a more professional look by having a business name, and will also allow you to ask for cheques to be written in your business name only for example, 'Bloggs Business Services'.

If you intend to, or have, created a limited company you will want to open an account in the name of your company. You will need to have your limited company formed before you visit the bank as you will need to provide items such as your Certificate of Incorporation.

HOW DO I OPEN A BANK ACCOUNT?

Your current bank is not always the best bank to open your business account with. There are several reasons for this:

• Different banks offer different business start-up accounts: some have no charges for a set period, internet banking may or may not be offered, or may not offer 24-hour availability.
• A bank that does not have you as a customer can be very keen to offer you the best deals.

Make an appointment with your chosen bank, you will need to take the following documentation and ask if they require any further documentation:

• A business plan.
• Where your start-up finance is coming from (if applicable).
• Information about signatories and who, if any, are your partners.
• If you are a limited company the bank may well want to see your Certificate of Incorporation and other paperwork related to your incorporated company. 

CAN I BANK CHEQUES IN A DIFFERENT NAME TO MY ACCOUNT?

If you had a bank account in the name of 'Joe Bloggs T/A Bloggs Business Services' and a cheque was written out in the name of 'Bloggs Business Services' or 'Joe Bloggs' your bank should accept it. 'Business Services' at a push should also be accepted.

However, if you have a cheque written out to 'Joe Bloggs' and you are a limited company, you face having the cheque returned with the prospect of having to motivate your client to re-issue a bankable cheque.

In circumstances where the cheque is written out to another name, for whatever reason, your bank manager can authorise its acceptance. Bank managers, like most people, are usually nice when informed beforehand of possible difficulties and are more likely to react badly if you try and pass the cheque through with no warning.

WHAT ABOUT ONLINE BANKS?

With Internet connection speeds growing and a higher percentage of the population adapt to life on the net, online banking should be a better option than ever. Some points to raise with potential suppliers before deciding if it is the right option for you:

• Is there a setup fee or monthly running costs?
• What are the charges for paying in cheques and withdrawals? It should be achievable to get these at less than a 'standard' bank account as the transactions cost less electronically than manual procedures
• What support is available, and what are their response times to e-mail/telephone enquiries?
• You would imagine that Internet banking was available 24/7 as standard, for the night owls out there check what the operation times are, some close during the early hours.

More on money guides and business bank accounts for freelancers.