Small Business Bank Accounts Discussion Area

Paulgonnabedebtfree

gloucesteroldspot wrote: »

I've just read through this thread looking for banking answers for my wife who runs a small business. She started out with Alliance and Leicester's free business banking, which was OK, but since the transfer to Santander it has (surprise surprise) been a disaster.

The lack of references frequently mentioned here is a particular problem - although interestingly they have been leading her to believe that this is a technical problem that they are still trying to solve. Others here suggest that it's a policy decision. I am coming round to the view that they will actually say anything to get you off their back.

The much vaunted 'advantage' mentioned here of being able to pay in cheques and cash at the ATM is meaningless to us - the ATM is nearly always broken and we have to go to the post office 100 yards up the road. It's an old Alliance and Leicester branch so I guess they are just waiting for a break in the lease to close it down and can't be bothered to fix anything.

Worse still has been the bank telling her customers that they cannot pay into her account by standing order. She set up a meeting with the bank's local small business adviser to discuss this, but they never turned up, never rang back and subsequently avoided calls.

Another recent bit of nonsense that had us laughing was when, following a complaint about the amount of time taken to effect a bacs transfer out, she was told that ' there are regulations they have to follow about the minimum time that must be taken over an interbank transfer'. How's that for flying in the face of all attempts to make the banking system fairer and more efficient?

How can a bank be this chaotic? How can it survive if it is? It must surely be a reflection at street level of chaos in management right at the top.

Anyway, I didn't really come on here simply to moan about Santander, although it's difficult to stop once you get going, but rather to say thanks to those who have shared their experiences of getting a decent inexpensive banking service that meets the needs of small businesses. It's obviously very difficult. If the current government really wanted to help small businesses then addressing this mess would be a good way of doing so. I hope it's something that Martin can bring up in his scheduled meeting with the Treasury Minister.

Regarding the references for incoming BACS payments: I still had a couple of customers paying into my Santander account this way (I switched the rest to the Co-op bank ages ago). Santander now seem to have fixed this problem. Can't be sure but it's taken something like 18 months. Might even be two and a half years. I know it went wrong shortly after a mid winter "upgrade". I can't trust them not to mess it up again though. It took me ages to get them to admit the problem even existed. Eventually, I made a more formal complaint about it. The response was something like "We are aware of it but it's not high priority. If you don't like it bank elsewhere." These days, nearly a grand a month is paid into my Co-op account. Santander could have had that if they hadn't been a Mickey mouse piggy bank.
Separately, last week I received a letter from them. It informed me that to get the (named) co-signatory off my account (following his death), I would have to send in a death certificate signed by a solicitor. I have always been a sole trader. I have never had a co-signatory. Santander are guilty of a serious breach of data protection laws.

cottager

Re payment references, I'm always very careful when setting up direct payments to our suppliers to include our account number (for our account with them, I mean) and our company name. Only one has a problem with this, and they're with Bank of Ireland. Evidently all they frequently see is a very truncated version of our 'official' account name, effectively little more than our surname (in full, as OH is a sole trader, it's quite long: the usual 'xxx trading as xxx', and our surname is very common!) and no part of the payment reference I provide is included by Bank of Ireland.

Consequently we often have reminders that we haven't paid, till I phone to give a date and details. It doesn't happen every time we pay them, but quite often. Whether it's because, with their HQ based in the republic, Bank of Ireland is technically "foreign" I don't know, but it's annoying even if it is only intermittent. They sometimes point out if we sent a remittance advice it wouldn't arise as they could identify our payment then, but my counter is they should get a grip of their bank! -- that's what payment references are FOR after all, and all the other suppliers pick up payments perfectly well from the references given with no remittance advice. Then they might say something like "Oh I know... well we have mentioned it but nothing seems to happen....".

Paulgonnabedebtfree wrote: »

Generally, bank transfer payments should only need to be set up once with the sort code, acc no. etc and any reference that you ask the customer to supply. Presumably you would want the customer reference to be the invoice number. However, I know that some banks would require the whole payment to be set up again if there was only one slight alteration.

Certainly the case with Natwest where there's no way to alter just a payment reference without re-doing the whole thing from scratch (business or personal accounts) so not really feasible to bring a payment reference down to the level of an individual invoice number which would be different every time. A card reader's involved with NW too, to set up a new payment as well as to make the first payment with those details (thereafter not necessary).

One thing which bugs me (I'd be interested to hear if it's the same with other banks) is that I cannot set up and keep on the system two separate payment arrangements, with different references, to the same organisation/account. It's relevant twice a year for us with HMRC. VAT isn't affected as that goes to a different-numbered HMRC account so I can keep a separate payment arrangement for it; but PAYE and tax both go to the same account, with different reference numbers needed to identify them.

PAYE goes out monthly and for 10 months of the year it stays unchanged, but in January and July I need to send the PAYE when due around the 20th, then cancel that arrangement and set up a new one (card reader 'n all) with the tax reference, pay that at the end of the month, then go through the same process again to change it back to the PAYE reference for the next 5 months. I'll need to do it again a bit later this month after the PAYE's gone.

Last new year it was more involved than usual, as it turned out after our accounts had been prepared there was a little more tax due than we'd paid on account already, which needed settling immediately, so at the end of December I changed the payment to send the balance due, then back again for January's PAYE, then again for the next lot of tax due on account end of Jan, then back again once more for PAYE from Feb onwards. Card reader involved as each time it was a 'new' payment of course, so quite a fiddle.

It seems rather silly to me that you can't set up two arrangements to the same destination account with different references. It may not be overly common, but it surely can't be the case that it never arises for any households or businesses?

Premier_2

cottager wrote: »

Standing in the Natwest queue yesterday I saw a poster for 2 years' free business banking -- may have been there a while but I hadn't noticed it before. Don't know if it could be of interest to anyone, but found the relevant details here:
http://www.natwest.com/business/starting-a-business/two-years-free-banking.ashx
It's for startups, in business for less than a year.

Most of the major banks offer free business banking for an introductory period (like 2 years).
HSBC, for example, offers this to anyone opening a new business account with them ... it doesn't have to be a new business, you can just move your existing business account to them.

But the issue is the cost after the introductory period expires. :eek:

Savvy_Sue

Premier wrote: »

But the issue is the cost after the introductory period expires. :eek:

which is why my advice has always been to work out how you use the account (cash in and / or out? lots of payings in? lots of payments out? by cheque or by BACS?) and then work out who offers what you need. THEN you shop around between those.

If you don't need a counter service (for paying in or withdrawing cash) then the options are wider, because you don't need a local branch. If you do need a counter service, then start with the banks you can get to easily and work your way outwards ... Some banks allow you to use post office counters - NatWest always didn't, and seemed to be the exception, but it's a loooong time since I last enquired - so that may widen the search again.

lovinituk

I'm a sole trader and currently using a personal bank account solely for my business which I am happy to carry on doing so until they ask me to stop. However I have received a few cheque payments in the business name which means I can't pay them into my personal account.

Can anyone suggest a business account I can open just for paying these types of cheques in? It will probably only be only a couple of cheques a month.

I'm leaning towards Santander (depsite the reviews here!) but I couldn't see anywhere if they require a minimum monthly deposit into the account.

Savvy_Sue

lovinituk wrote: »

I'm a sole trader and currently using a personal bank account solely for my business which I am happy to carry on doing so until they ask me to stop.

Just wondering if you will be happy to do so if the bank realise this is what you are doing and apply business charges retrospectively, which I believe they are entitled to do?

No further advice, but I think (and will be corrected if wrong!) that if you open an account as 'Fred Bloggs t/a lovinituk' then you would be able to pay in cheques made payable to either Fred Bloggs or to lovinituk.

Actually, there is one further piece of advice, and that's not to hold your business and personal accounts at the same bank, because if the biz a/c owes money then they can get acquisitive notions on your personal account.

lovinituk

Savvy_Sue wrote: »

Just wondering if you will be happy to do so if the bank realise this is what you are doing and apply business charges retrospectively, which I believe they are entitled to do?

I'm not entirely convinced that they would be able to do that. I've never heard of it happening before. Can you link to any examples? Martin Lewis even suggests using personal accounts...

"Step 1: Use a personal account if you can
If you are a sole trader (ie not a limited company) then you can simply use your normal bank account for your business, with all the better terms that involves."

(Source - http://www.moneysavingexpert.com/banking/small-business)

The account I am using is with a building society who don't offer business accounts at all so not sure how they would decide what charges to retrospectively apply anyway! My guess is they would ask me to stop or at worst, tell me I'm not welcome as a customer any more.

Savvy_Sue wrote: »

No further advice, but I think (and will be corrected if wrong!) that if you open an account as 'Fred Bloggs t/a lovinituk' then you would be able to pay in cheques made payable to either Fred Bloggs or to lovinituk.

Yes that is correct.

hareng

Considering this is how banks make their money, i would have thought they would have bent over backwards to get your business!

I had a right game finding a bank that would take me on, nothing incorrect or out of order, in fact perfect record.

First port of call was Lloyds been with them 31 years. Intervue arranged, that shook me- why we are doing them a service.
What was supposed to be a quicky 20 min intervue turned in to 1hr 55 mins blessed with what can only be described as advisors personal discretion - in other words biased.

Luckilly have a mate with wife who works for another Natwest branch, enquiries made to an understanding bank manager, 20 mins later on way home with BIC code the lot. Do have to use that annoying card reader that looks like a calculator.
Luckilly i dont have many cheques else i would be spending an hour 20 mins a day waiting to pay them in - people stupidly writing out forms and such like whilst others queing out the door! Hate it should be told to move on like most other banks do.

James1968

I used to have 2 business accounts with Abbey, but closed then 3 years ago (just after Santander take-over). Last week I received through the post 2 ATM cards (1 for each account). Talk about persistent.

Now looking into going part time self employed again, so am looking at business accounts again.
Like the sound of the Co-Op Bank business account, but am purplexed by the £4k p/m limit. I am planning on running an e-commerce site, so would be turning more than this within 6 months anyway.

Mrs_Chip

Hi

Some help please - I want to open a Santander business account (don't all shout at once! All our personal banking is now with them, ex A&L) but they seem to need a company registration number. I will be a sole trader, and I didn't think I needed to resister the company, only with HMRC as self-employed?