If you’re running a business from your personal bank account, you’re not alone. 60% of small businesses have never tried to open an account with a high street bank, and who can blame them? It’s often complicated, expensive, and downright slow. With an average 16 day wait to open a business bank account, it’s pretty impractical too.
If you’re a sole trader, it’s perfectly fine to use your personal account. You don’t need a business account, although it’s a different story for limited companies. But however you’re set up, it’s worth knowing there are some big downsides to using your personal bank account for business.
It complicates your tax return
Tax returns are complicated enough, without having to separate your business transactions from your personal finances. If you’ve got one account for everything – from your client payments to your grocery shopping – you’re facing a big job to pick apart the figures.
By having a separate business account, you can focus on one set of numbers as your year end creeps ever-closer. It’s miles easier to look at a clear trail of figures, instead of trying to extract business transactions from one huge list. And, when it’s easier to manage your finances, it’s easier to file your tax return.
It can look unprofessional
If you work from your personal account, any payments made will have to be addressed to you, and not your business. Not only does this look unprofessional, but it can put some clients off hiring you altogether.
If your business has its own account, you’re showing professionalism and commitment. This is not just a hobby or a side-line – this is a business that deserves to be taken seriously. It’s this confident attitude that will help to attract new customers.
It may even cost you money in the long-run
Yes, business bank accounts are often more expensive than personal accounts. With charges for drawings and deposits, it can seem like a minefield of hidden fees. But there’s one big advantage. These charges can all be off-set against your tax bill, which will save you money in the long-run.
There are plenty of options out there for your business account, so make sure you shop around. Don’t choose your current high street bank for the sake of convenience. Instead, go on the hunt for a deal that works for your business.
Let’s explore your options
Business banking doesn’t have to be difficult. You don’t need meetings with bank managers, long waits to open your account or nasty terms and conditions. Thankfully, there’s an alternative.
Arro gives you a simple, fast and safe way to manage your money, without the need for a regular bank. Just give us your company name and address, and we’ll get you started. There’s no credit check, and no hidden charges. All you need to do is fill out our quick and easy application form, and you’ll get instant access to your account.
With Arro, you’ll get all of the usual perks – a business debit card, online account management, and regular payment set-ups – without any of the hassle. So spend more time growing your business, and less time worrying about your finances. Sign up for your Arro Early Access account now.