Just in the last week I've come out the other side of a 2 month long process; opening a business bank account. You would think that in this day and age it'd be pretty simple - you'd be wrong. Opening my business bank account for trading has been a rather laborious task and is certainly not one I'd happily revisit.
How It All Started
When I started using my accounting company they recommended me a specific bank account. The bank is one which they're "partnered" with and is a private sector of Abbey National (if I remember right). The benefits are that the first 30 transactions that you make every month are totally free of all the standard business banking charges which usually apply. Sounds great doesn't it? I though so too, so I held on to all my cheques from clients and gave the new bank my application.
Two weeks (weeks) later, they'd managed to open my account, and sent me my welcome pack and paying in book. A few days later I realised that I still had no debit card - so I gave them a quick call. Apparently I wasn't allowed to have a debit card on my account, you're only allowed a debit card if you've been established as a business for 6 months and have over £15,000 in your account.
Now if you just mentally said "wtf" as I did at the time, then wait, it gets better. I asked them, vey politely, if this wasn't a problem they had frequently? (apparently it was not) Surely I couldn't be the only start-up opening an account who needed a debit card? They insisted that it wasn't a common problem and that most people were happy to make payments by cheque.
Can I just ask briefly - when was the last time you paid for anything with a cheque? Let me know in the comments.
Finding A Solution
So after 3 full weeks and exactly nothing achieved, I went back to my personal bank (HSBC) who I already held a sole trader account with for when I was both working full time and freelancing. They would be more than happy to open an account for my Limited company they said, but I would have to close my sole trader account as the two can't be in any way migrated or merged. Luckily for me I'd barely used the sole trader account, but it could've been a big pain if I'd waited to become Ltd.
On the plus side, HSBC were able to set up my business bank account in 20 minutes rather than 2 weeks, and I had my new Visa debit card 2 days later. My first 30 transactions every month aren't free, but I do have 18 months of totally free business banking - which is a start!
Do your research, find out what's included before messing around with business bank accounts. In the end I was forced to cash client cheques to my personal account and then my accountant had to backdate a whole load of stuff to ensure that the money was marked as going through my business account and subject to the correct amount of tax. Nightmare.
Have you had any business banking nightmares? I'd love to hear your stories - drop me a line in the comments!