Open Association of Landscape Industries
What is the best bank for a small to medium sized business?
I am not going to influence the start of the debate by giving an opinion but it would be of great interest to know who is providing the best service for small to medium sized land-based businesses at the moment?
Please contribute both positive or negative experiences.
Please contribute both positive or negative experiences.
Replies to This Discussion
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Permalink Reply by Fenlandphil on -
I think Colin with Santander its, variation in cheque clearing times, usually if you deposit a cheque in your account then post a cheque out to a supplier it would be a reasonable assumption that the incoming cheque would be cleared before the outgoing one. As I understand it with Santander often incoming cheques take longer to clear than outgoing ones, years ago a bank manager would look at an account see that there were cheques or funds about to clear and pay outgoing cheques with the knowledge that there are funds (abeit not cleared) in the account.
If you have a large credit balance in your account or are running well within your overdraft these thing are not a problem but when cash flows are very tight and people are hard up against their overdraft limit, cheque clearing times become critical. In these circumstances a decent bank manager with some discretion can be vital to a businesses survival.
Few people choose to be in financial difficulties but when they are I think it would be sensible for banks to stop charging punitive fees for bouncing cheques or debits these measures only make a difficult situation worse and do not assist a customer manage the situation.
Colin@Green Room Gardens said:I am loving the fact that people seem to know how long my cheques take to clear in my bank acount!!! They are definately (in some caseses) cleared in 3-4 days I can withdraw the money and actually spend it, never had aproblem with boucey cheques
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PRO MemberPermalink Reply by Dan Frazer Gardening on -
I mean using a seperate personal account for business and only business. I am considering it due to the much better service levels.
Gary @ Acer Paving said:I would think using a personal account for business would be a tax nightmare, ( separating personal costs from business costs ).
Remember, it's not you you've got to satisfy on this count it's the taxman should you ever be audited, ( God forbid ).
Besides the fact that as soon as the bank rumble you're using it for that purpose they will make you change to a business account anyway.
Dan Frazer Gardening said:Can I ask who uses a personal current account for their business and how have they got on with it?
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Permalink Reply by Busy Bee Garden Services Limited on -
We used to when we were a sole trader type of business with no problems, I was only ever and still only want a bank to hold money for me rather than credit facilities etc etc. I would not of changed only I had to set up a business bank account due to the business turning into a limited firm.
Dan Frazer Gardening said:I mean using a seperate personal account for business and only business. I am considering it due to the much better service levels.
Gary @ Acer Paving said:I would think using a personal account for business would be a tax nightmare, ( separating personal costs from business costs ).
Remember, it's not you you've got to satisfy on this count it's the taxman should you ever be audited, ( God forbid ).
Besides the fact that as soon as the bank rumble you're using it for that purpose they will make you change to a business account anyway.
Dan Frazer Gardening said:Can I ask who uses a personal current account for their business and how have they got on with it?
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Permalink Reply by Rob Glassborow on -
I do, and Its alright if you are a sole trader, and have an adequate scheduling and accounts system. It makes no odds to the accounts as your turnover minus your receipts equals your taxable earnings.
Its only if you become a limited co, or have multiple employees that it is neccessary.
Its very quick to credit your cheques, and transfer money, and its free.
Dan Frazer Gardening said:Can I ask who uses a personal current account for their business and how have they got on with it?
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PRO MemberPermalink Reply by Gary RK on -
Most personal accounts have a clause in the t&c's that if you use it for business (whether sole prop or not) they have the right to charge fees.
Also HMRC do not like this and strongly advise against it. Also if they query your submissions they can and will look at at all your personal transactions, something that can be avoided with a separate business account.
Each banks 'T&C's show their cheque clearing cycle, here's ours:
Clearly if they fail to follow and you are subsequently charged, you have a case for refund of costs and damages.
Regarding using a personal account for 'business', my normal barclays current account states - see section B:. Now whether you can 'hide' running a business from personal account is another issue, if do they may well be able to back charge transaction costs;
I can only suggest you check in person with your own bank to get the full facts for you own situation.
By the way our business banks with Barclays and we really have no problem with them, they have business section upstairs in our main branch which works well....
However, like most I would welcome less charges....;-))
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Permalink Reply by Rob Glassborow on
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If the revenue audit you they will ask for all your accounts, including your personal one, so it makes no difference if you have a separate business account.
It is only when you need to separate business profit for corporation tax that a separate account comes into play, or if you are Vat registered that it becomes more important. However, the benefit of corporation tax has long gone. For the sole trader it is perfectly okay to use one personal account. After all that is what you get paid, and the receipts are the proof of tax deductions. As long as your work schedule lines up with the funds flowing through your account, and the receipts tie up with the expenditure there is no problem.
I got audited in 2005, at the time I was a Ltd co and had a separate business account. It was the bank accounts that they seemed less interested in, and more with the sales, and purchases receipts. Once this proved to tally with the tax returns, everything was ok.
The thing is with business banking is that it is weighted with charges, and it isnt doing you any favours unless you have multiple employees, or need overdraft or loan facilities from the bank. If you are cashflowing in the black, then your current account is sufficient for the sole trader.
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PRO MemberPermalink Reply by Gary RK on -
I can only relate what I was told originally about business use of personal bank accounts and how viewed by HMRC.
Irrespective of that issue, it's clear that most/all Banks prohibit such use.
As said, whether they find out and how they may back charge you would ensure that, for me, I would go down the separate busines account route.
It would seem good business practice?
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PRO MemberPermalink Reply by Phil Voice on -
Lloyds: We couldn't trust bank managers
http://www.thisismoney.co.uk/savings-and%20banking/article.html?in_...
'The traditional local manager with a personal touch has been replaced by bureaucrats in head office who have a better idea of who to lend money to, according to Sir Win Bischoff.'
'The local bank should have one manager who a businessman or woman can deal with, rather than a series of teenage area managers poring over a small business's accounts which have survived many recessions.'
It's a must read with some mind boggling views of the boss of Lloyds TSB, Win Bischoff.
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PRO MemberPermalink Reply by Austin Powell-Allen on -
I am currently using Aliance & Leicester part of Santadar they seem to be very good as they offer a free account as long as you pay in £1000+ a month but keep it under there top value which is great for start up thats for the basics and you can pay in cheques through your local post office so if you work in lots of villages and small towns with a post office it saves having to drive into town and pay a high parking fee (inc. internet banking) if you want more premium services these are charable but try to do your homework. The Business link website seems very helpful for this.
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Permalink Reply by Fenlandphil on
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Yesterday evening a lad who used to work for me popped in, (he does from time to time) he told me he had yet to be paid his wages from August by his current employer. The firm he works for has had their bank cut their overdraft despite having plenty of work and orders.
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Permalink Reply by Fenlandphil on
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We converted our overdraft to a loan with Natwest ,as I thought that interest rates were going to rise rapidly and I wanted to fix my costs and pay down the borrowing.
So far interest rates have not risen so that was a wrong call on my part, it did take a devil of a time for them to sort out the loan, whether they thought too that interest rates were going to rise and wanted to get more money out of us I don't know.
Gardens4u.co.uk said:has anyone had a high street bank loan since recession - to help with cash-flow , expansion, investment or vehicles from your bank or other ? not loan co.
IMO/ experience , they are all a rip-off ! and dont help you.
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PRO MemberPermalink Reply by Gary RK on -
Well, I can no longer recommend Barclays as a business bank.
Since the start of the year we have had no end of problems with their business banking centre in Leicester - overdraft problems (even though we don't use it !), trying to close our accounts, working captial loan problems, etc
And the piece de la resistance, is that we had a loan refused because, according to them, we have a 'dormant account' with no no money coming into to it - so we are a bad risk !
I did point out that the 'dormant account' was not our Ltd company trading account, but a linked Business Reserve Savings Account.
The response ?, oh our computer system doesn't recognise the difference. It just assumes you are not trading well as there is no money going into the account!!!!!!!!!
The Local Business Manager seems helpless to deal with or over-rule HQ. his response was to reapply by comming into the branch with last 3 years trading acounts. Oh joy another day to be wasted !
So, we are mid-swap to the FSB's Co-Op business banking - totally FOC.
ps in fact we got our loan for a new vehicle via the leasing company at a rate almost similar to that of Barclays with ONE phone call because we had used them before .
Bankers, more like Merchants...:-)
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