Banking Tips for Small Businesses

One of the biggest decisions any small business will ever make is how to deal with their finances.

A quick internet search in this regard is like diving into a pool of sharks, and there’s no shortage of banks and big finance experts out there fighting for your money.

Banking tips for small businesses

Running a small business is no walk in the park though and you need to be sure your chosen provider will bring your business forward, rather than leaving you with nothing but big bills and a nasty headache.

A better way to manage your finances

With Hiveage you can send elegant invoices to your customers, accept online payments, and manage your team — all in one place.

It’s a topic people shy away from at times, but every small business needs to get their finances right – whether that involves shopping for the right loan to buy new equipment or making sure all your income tax liabilities are covered.

Here are some useful banking tips to put you on the road to financial success.

Finding the Best Loan

Before you go to the bank you’ve been with since you were at school, or to a company with an advert featuring cute singing fruit or critters, have a good look at the range of options available to you.

For starters, check out the range of government-backed support and finance for small businesses which is available in the form of grants, financing and loans, and mentoring/consultancy.

The UK government’s website enables you to input information such as your type of business activity, number of employees, whether you’re a startup or established firm, and the type of help you’re looking for. Options on offer will include finance, equity, and grants.

Some of the financing offers available here are very specific. You can apply for loans for particular regions – or even counties – and interesting options such as interest-free micro-loans to help business startups are available. Some of these will have particular criteria (such as a minimum turnover) but there is such a wide range of possibilities out there it’s likely you’ll find a match for your business.

Shopping for the Best Bank Account

The UK has a new current account switching service that (in theory) standardises and simplifies the process of switching between UK banks and building societies. But how do you find the best deal?

The “Which?” guide to choosing a bank account notes that the best current account for you might not necessarily be the one with the best rate. Much depends on your financial situation. If you’re always in the black for example, you’ll benefit from an account that rewards a healthy balance.

Sites like knowyourmoney and which4u provide useful information on business bank accounts, allowing you to compare accounts for different types of situation. They also provide further useful information on topics such as the fees due after the initial welcome period. Most accounts will start with free banking – the time periods on offer here will naturally vary – but then move to a fee-based approach.

Finding the Best Business Credit Card

It’s important to remember that business credit cards may carry very different conditions – fraud liability for example – to consumer credit cards and you should be sure to carry out research before committing to a particular option.

Comparison websites like Money Supermarket and Moneyfacts allow you to compare business credit cards side by side for their various features. Both sites provide similarly intuitive feature listings detailing the pros and cons of various providers. You should also look carefully at the APR and annual fees, as these can vary wildly.

As credit cards can be an expensive way to borrow money, the best advice is to always repay the balance in full before you’re charged interest on it.

What Expenses Can I Claim Off Tax?

A good accountant should be able to tell you this but, if you don’t feel you can afford one, you’ll end up trying to manage the sometimes complicated claim procedure yourself.

Starting with your car, if you use it for business purposes you can claim on the mileage as a percentage of the business use. For example, if you estimate that you use the car for business 50% of the time and for pleasure the remaining 50%, you can claim 50% of the mileage at 45p a mile for the first 10,000 miles and 25p per mile after that.

A motorbike will bring you 24p per mile with no top limit and, believe it or not, you can even claim 20p a mile for a bicycle.

You can also claim for office equipment and consumables such as printer cartridges which are pure business expenses. If you work from home, you can claim a percentage of your rent or mortgage and utility bills.

Similarly, with things like phone bills, you have to work out how much of the bill is down to your business. Ultimate expenses guides are available from HMRC for both self-employed and limited companies.

What about Accountancy Packages?

The big names in the business are Sage and Intuit Quickbooks. There are several flavours of Sage available: Sage 50, Sage Instant, a relatively basic version called Sage One and also an entirely cloud-based version.

In our humble opinion, the likes of Sage and Quickbooks are overkill for your typical freelancer or small agency. They’re powerful, no doubt, but that power comes at the cost of a steep learning curve and relatively prohibitive costs.

Even if we do say so ourselves, Hiveage provides a tailored solution for freelancers and small businesses, and it’s incredibly easy to pick up and use too boot, not to mention the wallet-friendly pricing. Check it out!

Choosing an Accountant or Financial Advisor

As your accountant will be in a position of great trust, make sure you confirm the firm or person is registered or licensed and has a clean record with regulators. You’ll also want to be up to speed on bookkeeping basics yourself.

Also, don’t be afraid to ask questions – for example, whether the firm has ever dealt with a business such as yours and understands both how you work and the best way to help you. Remember, accountants aren’t cheap – even as a sole trader, you can pay upwards of £500 for an accountant to do your annual accounts from start to finish.


There’s lots of great free expert advice out there to help you navigate the world of small business banking options so take the time to do your research.

Here’s a summary of our top tips:

  • Check out government websites for good deals and information.
  • Use legitimate comparison websites to find the best bank account.
  • Be extra careful when choosing a credit card, and pay it off in full before interest becomes due.
  • Make sure you claim back all expenses you are due, and use appropriate HMRC guides to work out what you are eligible for.
  • Research accountancy packages if you feel confident managing your own accounts.
  • If you do need an accountant, check their credentials carefully and make sure they’re a good fit for you.

Are there any small business banking tips we’ve missed? Get in touch in the comments and let us know.

Join thousands of business-savvy entrepreneurs on our mailing list.

Curated emails that’ll help you manage your finances better.