business account yay or nay?
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  1. #1
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    Default business account yay or nay?

    I am a newly registered childminder. Still looking for mindees. Im thinking I would prefer to receive payments through bank transfers. Im curious how you have chosen to accept fees? And did you open a business account. I am undecided.
    Thanks for reading

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    A lot of childminders use their normal accounts but I have a free online business account as my local council wanted one for money they were paying me. I find it easier having a separate account and at the end of every month I transfer money into my personal account for my bills etc. You can set up a second personal acc instead of a business one to do that. You have to watch out for charges with a business acc as they can be high I am lucky at the moment as I have no charges as its all online. Parents pay into my account weekly/monthly.
    Pixie Dust

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  4. #3
    Simona Guest

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    Quote Originally Posted by Pixie dust View Post
    A lot of childminders use their normal accounts but I have a free online business account as my local council wanted one for money they were paying me. I find it easier having a separate account and at the end of every month I transfer money into my personal account for my bills etc. You can set up a second personal acc instead of a business one to do that. You have to watch out for charges with a business acc as they can be high I am lucky at the moment as I have no charges as its all online. Parents pay into my account weekly/monthly.
    Totally agree with you.
    keep business separate from personal...good financial sense and so much easier to manage!

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    I don't see any reason for keeping it separate. Why pay business account fees why you can have a separate personal account at no cost.

    I pay all of my childminding expenses through my credit card and I don't have a separate one of these for business, how will you pay for food?

    As long as you keep correct accounts it doesn't matter.

    Lastly, if the HMRC audit you, they will go through every account in your household, not just a business account, this includes yours, DH and any children account.
    Debbie

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    Business account is not necessary and can be expensive.
    I use my regular bank account. So I do not need to be transferring money across.
    Your accounts should clearly show your income and expenses so no need for bank accounts to be separate.
    Of course, if you feel it would help you some way then there is nothing stopping you, but do be careful of business account charges.

  7. #6
    Simona Guest

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    Quote Originally Posted by Chatterbox Childcare View Post
    I don't see any reason for keeping it separate. Why pay business account fees why you can have a separate personal account at no cost.

    I pay all of my childminding expenses through my credit card and I don't have a separate one of these for business, how will you pay for food?

    As long as you keep correct accounts it doesn't matter.

    Lastly, if the HMRC audit you, they will go through every account in your household, not just a business account, this includes yours, DH and any children account.
    You can have a regular bank account for cminding...no need for a business one where you have to pay charges...yes it does make a lot of sense to keep things separate and that is how HMRC likes it and yes HMRC can go through them all...so separating them is best when they make enquiries

    What we pay for cminding is totally different from personal expenses and should not be mixed....do you think Lord Sugar has one account for his business and personal expenses? surely not!

    we are a small business and we need to run it the proper way....sorry I disagree but that is how I personally feel!

    How do we pay for food? ..what we buy for the business has nothing to do with what we buy for our families...it means two separate debit cards and if necessary 2 purses which I have had for 20 years!!
    Last edited by Simona; 28-09-2013 at 09:05 PM.

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    It may be easier to keep separate, but not necessary, online banking is so efficient these days, providing you keep good paper records, I don't think you would need separate accounts. I suppose it depends on how big your set up is, I only have 3 full timers and it is very straight forward for me to keep one account!

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    I have set up a business account purely so I can use it for business, I do not pay any charges for it. Thought I would keep any other income totally seperate, but that's just me lol xx

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    Two separate accounts with two different banks, much easier to keep track of everything and with internet banking easy to do transfers. If ever the taxman needs to get involved surely it is better to have separate accounts.

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    As you can see there isn't a right or wrong way to do it, just the best way for you.
    Debbie

  15. #11
    Simona Guest

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    I think we are missing the point...it is not a question of what is right or wrong ...it is a question of 'how to run a business' or be a small entrepreneur

    years ago childminders earned 'pin money'...no more now, some have big turnover, others keep a small business.
    How can we 'withdraw' money each month from our income if our income is already in our personal account?

    how do we save money for tax ..if the money is in our personal account?
    where do we put the deposit we charge?
    where do our business Direct Debits get paid from? our personal account?

    What we need is a revised 'business' training, learn the appropriate terminology when running a business and the intricacies and benefits of running a business from home...many cms are not aware of the many benefits they can draw out, the difference between wages and withdrawls, tax free benefits, legitimate allowances etc etc

    I have 2 home based businesses and both give me benefits which are totally different but my accountant is qualified to identify them and claim.

    Agencies are also supposed to help cms understand how to be business minded...or in fact do all the accounts for them at a cost.
    If agency cms decide to let the agency run their financial affairs I would envisage the agency would want totally separate accounts and not one that is mixed with family finances?

    Only time will tell...

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    I have a business account and I have never used it. It is free for 2 years. Tbh need to cancel it. I just don't see the point now in having it although at the start I was adamant I wanted one.

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    I have one account I use for everything and always have!

    All my money goes into the account... all my expenses come out... I keep a float in it to make sure that if I am not paid on time I do not go overdrawn...

    I also have a savings account I run alongside it for my big expenses (holidays, insurance, possible tax bill etc).

    I think I would get confused if I had 2 accounts I am not very number literate

    I get printed statements every month and write all over them, so I can see what money has come from whom.

    No right or wrong way - you should do whatever works best for you. Hth

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    I have to use our personal account at the moment as I am just setting up and set up costs had to come from somewhere. I keep on top of the business by keeping up with my accounts. I know exactly what I've spent and what fees have been paid. Once I earn more than I've spent, I will keep some back for tax and then know what more I have to spend on resources and as income. I'd thought of setting up a business account but would spend all my time transferring money which I think would be confusing.

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    Also have a monthly payment going out to an account for saving money to pay my tax bill. Using excel to set up an account sheet for every tax year this is all easy to keep track of.

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    Thank you all for your replies. Very helpful.
    I think i will try to find a business account that wont charge me anything. I am aware there should be tax benefits. I'm still trying to work everything out.
    Doing everything as clean and clear as possible is bound to save me confusion in the long run.
    I plan to transfer myself a salary and save a percentage for tax.

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    I use HSBC - they have free business banking and I can do everything online. After 18 months there is a small charge for paying cash and cheques into the business account so DON'T pay cash or cheques into it - pay it into the business money manager account that runs alongside it which is free and then transfer it over or leave it in the money manager.

    All my income can clearly be seen in this account and I find it much easier at the end of the year for making sure everything correlates.

    Its a brilliant bank and online easy to use. I would recommend them.

    My expenses are not so easy because such a lot of my expenses are a proportion of my household expenses - like food, cleaners, petrol electric etc so i just work out the proportion at the end of the year or claim the appropriate mileage.
    As for major expenses like new pushchair or something i tend to put that on my credit card so again not from my business account but easily able to keep receipts and credit card statements.

  24. #18
    Simona Guest

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    Quote Originally Posted by sarah707 View Post
    I have one account I use for everything and always have!

    All my money goes into the account... all my expenses come out... I keep a float in it to make sure that if I am not paid on time I do not go overdrawn...

    I also have a savings account I run alongside it for my big expenses (holidays, insurance, possible tax bill etc).

    I think I would get confused if I had 2 accounts I am not very number literate

    I get printed statements every month and write all over them, so I can see what money has come from whom.

    No right or wrong way - you should do whatever works best for you. Hth
    Thanks for your input Sarah...the message I am trying to pass on is not that it is right or wrong but to 'aspire' to run a small business in a very efficient manner and according to the rules of finance and administration......
    I do get slightly worried when cms always say that we are 'ALL' different and do things our own way....some areas have a common denominator maybe?
    isn't that what is happening with Ofsted at the moment ...one framework and yet each inspector interprets it her way???

    We are not all good at 'everything' and where we have areas that need a bit of learning we should take it to improve our skills

    I am totally disinterested in IT but have to do it because it helps my business and I seek professional advice to get it right...if I 'did my way' my computer would crash every day!!!

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    Quote Originally Posted by Simona View Post
    Thanks for your input Sarah...the message I am trying to pass on is not that it is right or wrong but to 'aspire' to run a small business in a very efficient manner and according to the rules of finance and administration......
    I do get slightly worried when cms always say that we are 'ALL' different and do things our own way....some areas have a common denominator maybe?
    isn't that what is happening with Ofsted at the moment ...one framework and yet each inspector interprets it her way???

    We are not all good at 'everything' and where we have areas that need a bit of learning we should take it to improve our skills

    I am totally disinterested in IT but have to do it because it helps my business and I seek professional advice to get it right...if I 'did my way' my computer would crash every day!!!
    Maybe this is why we differ - I have an accounts/admin background and a good system to track my money. My accounts are all linked to a software package which provides a profit and loss and balance sheet for whatever period I need. Where the money is is irrelevant.
    Debbie

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    Quote Originally Posted by NessaTT View Post
    Thank you all for your replies. Very helpful.
    I think i will try to find a business account that wont charge me anything. I am aware there should be tax benefits. I'm still trying to work everything out.
    Doing everything as clean and clear as possible is bound to save me confusion in the long run.
    I plan to transfer myself a salary and save a percentage for tax.
    Please let us know if you find any tax benefits as I am unaware of any.
    Debbie

 

 
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