Advice on business bank accounts please.

cosmic4z

Hello,

Very recently, my business has started to do very well; so much so that I'm considering incorporating as a LTD company, and setting up a business bank account.

I will be recieving payments in to this new account, in different currencies, GBP, USD, EURO etc.

I'm assuming it will make more sense (simpler) to have one single sterling account, and all payments in will be converted to GBP.

Do different banks offer different conversion rates, for monies paid in foriegn currency?

Also, is there a legal requirement for certain types of business (LTD company etc), to use a business bank account.

What advantages do they have over regular bank accounts?

As far as I can tell (and I may be wrong), you get no interest on your funds, and they charge you a monthly fee; so it's hard to see what benefits you get for the money you pay (both in lost interest, and the monthly fee). I'm probably missing something, and don't fully understand the situation.

So yeah, what are the advantages?

Thanks,

jonesMUFCforever

You cannot have a personal limited company account?
Do you not have an accountant to advise?

silvercar

I will be recieving payments in to this new account, in different currencies, GBP, USD, EURO etc.

I'm assuming it will make more sense (simpler) to have one single sterling account, and all payments in will be converted to GBP.

Depends on your turnover. I started off with one account and all payments were automatically converted to sterling when paid in. Now I have foreign currency accounts, so that I can manage the timing of the foreign currency exchange. If you want to get more sophisticated you can do forward exchange contracts to fix the exchange rate on expected income, though if cash flow is an issue you will need to consider overdraft facilities to manage this.

cosmic4z

jonesMUFCforever wrote: »

You cannot have a personal limited company account?
Do you not have an accountant to advise?

No accountant yet. In the process of talking to one though.

cosmic4z

silvercar wrote: »

Depends on your turnover. I started off with one account and all payments were automatically converted to sterling when paid in. Now I have foreign currency accounts, so that I can manage the timing of the foreign currency exchange. If you want to get more sophisticated you can do forward exchange contracts to fix the exchange rate on expected income, though if cash flow is an issue you will need to consider overdraft facilities to manage this.

Thanks.

Could be in the region of 100k GBP per year, possibly more. I'd say about half of this will be in USD, about 45% in GBP, the rest in various other currencies.

It's all coming from Apple, so I need to check with them I can direct different currencies to different accounts.

Don't see myself needing an overdraft facility.

happymoneysaver1

If you are running a business you should have a business bank account. Are you using a personal account at the moment? Main advantages are that it keeps business as business and personal as personal. It would also open the gateway for funding should you wish to expand in the future. If you are going to be doing a lot of business in foreign currency, a foreign currency account could maybe be the answer. I know of certain banks that have an international presence, will offer these accounts as well as maybe opening accounts in the country of the funds you are receiving. A lot of banks offer free business banking for 12/18 months.

If your turnover is going to be a good as it is and you are looking to grow your business, starting off on the right foot with a good business bank account can pay dividends - going on my own personal experience with business banking, Depending on what bank you go with, you will have your own relationship manager and if you build up a good relationship with them, you will find that they have discretion when it comes to certain fees for your account.

I think you should really have a wee research on the Internet re business banking and make an app to go see someone. I know we can see banks as the enemy but they should be used to our advantage, especially if it means we will be making money

cosmic4z

happymoneysaver1 wrote: »

If you are running a business you should have a business bank account. Are you using a personal account at the moment? Main advantages are that it keeps business as business and personal as personal. It would also open the gateway for funding should you wish to expand in the future. If you are going to be doing a lot of business in foreign currency, a foreign currency account could maybe be the answer. I know of certain banks that have an international presence, will offer these accounts as well as maybe opening accounts in the country of the funds you are receiving. A lot of banks offer free business banking for 12/18 months.

If your turnover is going to be a good as it is and you are looking to grow your business, starting off on the right foot with a good business bank account can pay dividends - going on my own personal experience with business banking, Depending on what bank you go with, you will have your own relationship manager and if you build up a good relationship with them, you will find that they have discretion when it comes to certain fees for your account.

I think you should really have a wee research on the Internet re business banking and make an app to go see someone. I know we can see banks as the enemy but they should be used to our advantage, especially if it means we will be making money

Thanks for this. Sounds like great advice. I'll make a few appointments.

missile

cosmic4z wrote: »

Thanks for this. Sounds like great advice. I'll make a few appointments.

Prepare yourself for the inevitable 100+ questions, market research, sales pitch.