Businesses should have a separate bank account for their business transactions as it will make preparing their accounts so much easier.  Trying to extract business income and costs from a personal account takes a lot more time and if you needed to prove any business transactions when applying for a loan, for example, they would have access to your personal spending habits too.

If you are a new business you will be able to find a bank that offers you 18 months of free banking which is ideal when spending needs to be limited.  But it is important to know what their charges will be once you come out of that free period and how those charges fit with your business.  If you have been out of the free period for a while have you checked what your bank is charging you for and whether you are on the right charging tariff for the business transactions which you do?

Banks often have two levels of charging - one which is beneficial for businesses who do most of their banking via the internet and the other for businesses who pay suppliers by cheque and bank a lot of cheques.  Most now have a fixed monthly fee which will cover certain transactions which is ideal if you stay within this as you know exactly how much you will pay each month.

Bank chargesIf you pay the majority of your suppliers online and your customers mostly pay you online then you should ensure you are on the correct bank tariff for this - you will be amazed how much money you could save.  It will cost you more than the more traditional tariff when you write a cheque or bank a cheque from a customer (around £1 for each) but if this type of transaction is rare it is definitely the more cost effective option.

If you bank cash take a look and see what this is costing you. This can be between 90p per £100 and 1% of the amount banked. It makes sense to use cash to pay for things when you can - obviously keeping a record as you will have no other proof and so your accounts are accurate - and then bank the remainder so your charges are less.

Check your bank charges now and see if you are on the best tariff for your business.