Last updated on 5th October 2023 at 13:49 by Alex Nicholas
You do not need to have a business bank account to run a Shopify website, but as you are running a business and taking customer payments online I would definitely recommend either setting one up or using a dedicated bank account to keep all payments to and from Shopify separate from your day to day living.
As a small business owner, it's important to manage your finances effectively, and having a business bank account can help you do that. A business bank account can keep your personal and business finances separate, accept payments, and give your business more credibility. This is especially important if you are planning to start an online store on Shopify.
While it's not a requirement to have a separate business bank account to use Shopify, it's highly recommended. You will need a business bank account to manage your finances, accept payments, and keep track of sales tax.
Additionally, having a business bank account can give you access to financing options and rewards programs.
Opening a business bank account is a straightforward process and there are many options available for small businesses. Keep in mind that some banks may require a business license and other documents to open a business account.
In terms of using Shopify specifically, you will need a Shopify balance account or a payment gateway to process transactions. Shopify payments can be connected to your business bank account or corporate card. Keep in mind that Shopify charges transaction fees for each sale you make on their site.
Small business bank account
A small business bank account or a bank account that is NOT a personal bank account is an account that is owned by your company and not you.
If you're in the UK and own a limited company, it's a legal requirement to have a business bank account and there are plenty of high street banks out there that will offer you an account. It's often just a case of choosing the account that suits your needs best.
This type of account is likely to be different to an account that a big corporation will use, which will have application software that ties into cash flow software, operates in many different currencies and does lots of international trade.
Best business bank account for Shopify
There's no hard and fast rule as to which is the best business account for Shopify, but I would recommend using one of the well know banking firms such as Natwest or HSBC.
There are a number of internet-only banks that will happily offer you a low-cost solution but in my opinion, these are a bit of a risk because they often aren't as established as the big banks and will cause high problems if they collapse.
But at the end of the day, I'm an eCommerce SEO consultant and not a chartered accountant, so I strongly advise you to take legal advice if you're not sure.
It's definitely worth shopping around though because with every business comes a yearly tax return that needs to be filed with HMRC, and some business bank accounts come with great little tools that not only hold your money but also create invoices and give you a breakdown of your revenue.
Most business bank accounts will also offer you a credit card, which is fine in itself, but they nearly always come with a yearly fee and high-interest rates.
Foreign currency accounts
If you need a foreign currency account because you regularly make and receive payments from places like America then I recommend looking for an additional account from banks like Starling Bank or Revolut.
Accounts like these offer you much better exchange rates and a small monthly fee.
Using credit to fund business purchases
Lastly, you might be looking to raise money for an existing or new business in the form of a loan or a credit facility such as an overdraft.
Most banks will give you the option to take out a loan with them, but they will expect you to provide them with a detailed cash-flow projection and business plan.
If you do then you can expect to pay that money back at interest rates that are higher than a personal loan (I'm not recommending you use a personal loan) and will likely be expected to provide security against the loan, depending on your company's and your own credit scores.