Even as a sole trader or micro-business, most tradesmen or women will benefit from separating their personal and business finances. Although business current accounts may have additional costs associated with them, they:

- demonstrate to customers that you are likely to be a reputable trader

- show government that you are running a legitimate business which is important when it comes to the likes of business expenses deductions

- make completing a tax return, or an engaging an account to do so, much easier.

You should ideally open a business bank account before you start trading. Existing businesses should also check for better ‘switcher’ business banking packages from time to time for the best deal or service.

Here’s a quick guide to the things to consider when looking for or switching a business bank account for your local tradesman business:

1. Shop around

Look beyond your existing personal banking supplier and try not to be lured by new account incentives which typically expire after a year or two. Compare the ongoing costs and, if applicable, interest rates.

2. Transaction and standing charges

‘Transaction charges’ can be likened to a handling fee for credits and debits to your business bank account. Cash and cheque processing charges are usually more expensive than the fees for electronic and automated payments.

Some banks charge a monthly, quarterly or annual fee for holding an account with them. This ‘standing charge’ can be instead of or in addition to transaction charges.

When looking for a business bank account provider, you will need to consider both the transaction and standing charges. For example, as a tradesman taking on lots of small jobs, an account with a fixed standing charge could suit your business better if you’ll make a lot of cash and cheque transactions.

3. Interacting with your bank

Do you want to manage your account online or in person? Online banking tends to be a standard feature with all business current accounts and enables you to manage your account and transactions outside of branch opening hours. Some banks might also have a small business account manager or centre in a local branch who could help with queries.

4. Location

If you’re a tradesman or local business that receives lots of cash payments, the distance to the nearest bank branch could be an important factor in your decision about which business bank account is best. As the adage goes, ‘time is money’ so it’s not wise to waste time travelling to make deposits.

5. Extra Services

Might you want a business savings account, loan, overdraft, credit card or another special feature from your chosen bank? Perhaps you want to be able to take card payments with a merchant account? Create a list of your essential and nice-to-have features before you start shopping around for your small business bank account.