How to switch your business bank account in the UK

Tilly Michell
3 minutes
Business tipsFinance
How to switch your business bank account in the UK
In this article

Switch your business bank account in the UK

Back in the day, companies had fewer options when it came to choosing a business bank account. Traditional banks ruled the roost and charged eye-watering fees for account management, domestic transactions and international transfers. 

Today, the rise of challenger banks and fintechs means businesses have more choice in how they manage their finances. Switching business bank accounts has never been easier, and could save you a lot of money and stress. 

If you’re tired of clunky, outdated systems, poor customer service and unnecessary charges, it might be time to switch. 

Why switch your business bank account?

Running a business comes with many challenges, but your business account shouldn’t be one of them. Here are the most common complaints businesses have when it comes to their account provider. 

Poor customer service

When you have a question about your business account, the last thing you want is to be placed on hold. In a recent Which? survey, 65% of banks scored just three out of five stars for communication, proving that most providers are failing when it comes to customer service.

Fintechs and challenger banks know that this is one of many areas where they can do better than traditional banks. So if you’re tired of listening to hold music, choose a business account like Airwallex, which offers a dedicated account manager who will respond to emails quickly and jump on a call when you need. 

Hidden fees

Do you scrutinise your bank statements? You should, because a lot of business accounts have hidden fees. These include monthly account fees, transaction fees when you collect and deposit money, and additional charges for foreign currency transfers and CHAPs payments

It’s worth comparing business accounts on fees and benefits before you commit. Not all providers are upfront about their fees, so make sure you read the small print. 

Limited card options

Having just one company card can create bottlenecks that hold up team objectives. Particularly when all expenses need to be signed off by your CFO.   

By switching to a business account that offers multiple cards, you can empower your team to make independent purchasing decisions and free yourself from the burden of manual expense management. 

No multi-currency options

A recent Airwallex survey found that 77% of UK businesses plan to expand their international presence in 2022, but two-thirds of decision-makers view international transaction fees as a “necessary evil”. 

In actual fact, businesses can avoid transfer fees quite easily by opening a multi-currency business account. Multi-currency accounts allow you to receive, hold and send money in multiple currencies without forced currency conversions. So you can trade across borders without the high costs. 

Use our handy guide to compare business accounts on features, benefits and fees.

How to switch your business bank account

Switching business accounts has never been easier. You don’t even have to leave your home or office.

1) Apply for a new business account 

Once you’ve chosen the account that’s right for you, you can apply online. You will need to upload some documentation, including:

  • Proof of identity, such as a picture of your passport or driving license. 

  • Proof of address, such as a bill or bank statement (if you’re a sole trader or freelancer).

  • Certificate of incorporation, memorandum and articles of association (if you’re a limited company).

It should take 3-5 working days for your account to be up and running.  

2) Update your collections process and invoices

Make sure customers start paying into your new account. If you’re an ecommerce business, that means updating the details in your payment gateway (i.e Shopify or PayPal). 

If you collect payments via invoice, email your customers to let them know you’ve changed your account provider. 

3) Update your direct debits and subscriptions 

Do a quick audit of your direct debits before you switch to ensure all your subscriptions are updated. Monthly outgoings will include online ad payments, software services and employee benefits.

4) Cancel your cards

Make sure that any cards associated with your account are cancelled and destroyed. 

If you have a credit card, you may have to do a balance transfer to your new provider. This should be a quick and easy process. Simply inform your new provider that you wish to do a transfer and let them know the details of your old credit card, they will do the rest. You can also request new debit cards from your new provider.

5) Move funds across to your new account

Moving funds from one business account to another is free for some providers, but others do charge a fee. 

Login to your old online banking service and select ‘external transfer’. You’ll need your new business account number and sort code, so keep this handy. 

Your previous provider may want to check that you are the owner of the new account. You can verify that you are the account owner by transferring a small amount (i.e. £0.01) from your new account to your old one. Once you’ve done this, you can transfer all your funds across. 

6) Update your accounting software

If you use accounting software such as Xero or QuickBooks, update your bank feed with your new account details. Doing this immediately will ensure your bookkeeping is kept up to date and you don’t have to chase up any missing transactions.

7) Close your old account 

There’s no pressure to close your old business account when you set up a new one, and many companies choose to keep more than one account running. But be careful, some providers will continue to charge account fees even if you don’t hold money in them. 

In order to close your old account you will need to fill out an account closure form, which can be downloaded from your provider’s website. Once you’ve emailed or posted your account closure form, your account will be closed within 5-10 working days.

Once you’ve closed your account, your statements will no longer be available online. In case you’re audited, ask your previous provider to send your transaction history covering the past five years. 

Switch to an Airwallex business account and pay zero account fees or transaction charges

Airwallex helps businesses manage their money in the cheapest and most efficient way possible with global business accounts built for growth.

We don’t charge any account or set up fees, and we won’t charge you any transaction fees when you send or receive money in the UK or internationally. No matter how much you’re sending or how many transactions you make. You’ll pay just 0.5 - 1% above the interbank rate for international currency exchange, considerably less than traditional banks. 

With an Airwallex account, you can issue virtual debit cards to your employees in minutes and empower your team to make independent purchasing decisions. You can also set monthly spend limits for each card and track expenditure in real-time, so you’re always on top of expenses. 

If you’re looking for an alternative to pricey, outdated business accounts, apply online today or click below to watch a 3-minute demo. 

Related article: Compare UK business bank accounts

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Tilly Michell
Content Marketing Manager

Tilly manages the content strategy for Airwallex UK. She specialises in content that supports businesses in their growth trajectory.

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