When it comes to running a successful small business, having the right bank accounts in place can make a world of difference.
Many small business owners underestimate the power of proper banking, but choosing the right business bank accounts helps you manage cash flow, save for taxes, and separate personal and business finances with ease.
In this post, we’ll walk you through the five bank accounts every small business should have to stay organised, compliant, and financially healthy.
1. A Primary Business Account
This is your main business account, the backbone of your business banking.
A dedicated current account keeps your business income and expenses separate from your personal finances, making it easier to track profitability and stay compliant with HMRC.
Many banks offer business current accounts tailored for small business banking with features like online banking, debit cards, and automated payments.
2. A Tax Savings Account
Tax season can sneak up on you, and without proper planning, it can cause cash flow issues.
Setting up a separate tax savings account allows you to put aside a portion of your revenue (usually around 20-30%) throughout the year, so you’re not caught off guard when your tax bill is due.
This simple step ensures you’re always prepared for your self-assessment, VAT payments, or corporation tax.
3. A VAT Account (if Registered)
If your business is VAT-registered, it’s smart to have a dedicated VAT account.
Each time you receive payment from a customer, transfer the VAT portion into this account. This keeps your VAT funds separate from your working capital and ensures you’re always ready to pay HMRC when the deadline arrives.
Managing types of business accounts UK like this helps avoid dipping into cash you’ll need for your VAT obligations.
At Legacy Figures Accountancy, we help you stay on top of your business financials and remain HMRC compliant.
Want to learn more? Let’s have a chat.
4. An Emergency Fund Account
Every business experiences ups and downs, so having a financial safety net is essential.
A separate account for your emergency fund helps you build a buffer for unexpected expenses, late-paying customers, or seasonal downturns.
It provides peace of mind and helps your business weather tough times without disrupting your day-to-day operations.
5. A Savings or Growth Account
This account is dedicated to the future growht of your business.
This could be monies used for investing in new equipment, hiring staff, or expanding your services.
By regularly transferring surplus cash into this account, you’re setting yourself up for growth while keeping your operational funds separate.
It also makes it easier to plan and budget for larger investments without impacting your daily cash flow.
Final Thoughts: What’s Best for You and Your Business?
Choosing the right business banking for small businesses is more than just opening an account, it’s about setting up a structure that supports your financial health and future growth.
By maintaining these five essential bank accounts, you’ll be in a much stronger position to manage your finances, plan for taxes, and invest in your business’s success.
If you’re ready to get your business finances in order contact us at Legacy Figures Accountancy today for a friendly, no-obligation chat. Let’s build your business on a solid financial foundation.
