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Banks / Building societies – choice of bank account for business

Comment 11th February 2016

Private sector regulations by most banks prevent their best bank accounts being registered in a business name.

I suggest that a little more legal regulation could lead to a lot less commercial regulation – a short law could force banks to offer all their best deals to limited companies as well as sole traders and private individuals.

They could still refuse on pretexts, so I obviously haven't thought this through completely!

The same law could insist that all bank accounts with online access and more than some large amount of customers allow standard format download to a wide range of software providers. This could allow easier business book-keeping and so easier paying of taxes, which helps everyone.

Why does this matter?

The Moneysavingexpert site states the effect of too little competition to provide business banking

http://www.moneysavingexpert.com/banking/small-business

"Personal bank accounts are usually fees-free if you’re in-credit, yet the opposite's true for their business brothers. There, charges of £25 per transaction are possible on top of monthly account fees, and this can be a nightmare."

There is another way of forcing banks to provide better service to customers implied in the next paragraphs.

If you need complex facilities, such as an account that automatically works with Sage software or need business assistance, other banks tend have more rigorous systems, but at a price.

The most hard to get-around of these, I think, is the data download. Some credit card companies like Egg Money and MBNA are quite sophisticated in printing statements so that there is no way you can use them for business, with no running total and monthly totals calculated in a way that doesn't quite make sense or at a different time to when the account is topped-up. (The only way to use them is to keep one card for one purpose and not to bother keeping track except when the money is direct-debited from a main bank account.)

The banks' ability to tie an account to a certain sort of software or present the data in an un-businesslike way could be outlawed for online accounts with large amounts of customers. Most banks allow some kind of download but not the most automatic. This is what one software provider writes about banks:

Does AceMoney support direct downloading of transactions from the banks?

No, AceMoney doesn't support direct data download from the banks. Implementation of such a feature is quite easy, however we can't do it because the banks are hiding the addresses of their OFX servers from public access. The only way to import transactions is through QIF or OFX files. Import of these formats is supported by AceMoney.

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