Reply to: Abbey cuts business account interest rates

[juststarting]

I've done research recently , the best thing I could end up with was A & L Reserve account - 4.1 % , no transaction charges. BOS do charge transactions... It is a pity A & L take 3 weeks now to open an account ...

[blacjac]

I can see what you're saying here - however:

1) It's useful to record transfers to and from the reserve account so that there's no ambiguity as to the nature of these transactions;
2) Interest payments within the reserve account are company income and need to be treated as such.

I'm not sure what accountant you use - but mine isn't happy to complete the year-end accounts until he's been through the bank statements in detail and understood the purpose of every transaction. In my understanding, this is the key to producing the most accurate accounts - I'd certainly rather he did this than draw conclusions from a number of (perhaps naive) assumptions I'd made.

1) OK, can see the point in that (I do transfer money from reserve to current to pay VAT, CT etx...)
2) I agree with this, interest received is recorded, it's just the transfers between the accounts I don't bother recording.

Max - please keep your responses constructive - this isn't the General forum.

Agree 100% with that one

[chicane]

Why?

Serious question, what advantage do you gain from recording this?

I can see what you're saying here - however:

1) It's useful to record transfers to and from the reserve account so that there's no ambiguity as to the nature of these transactions;
2) Interest payments within the reserve account are company income and need to be treated as such.

I'm not sure what accountant you use - but mine isn't happy to complete the year-end accounts until he's been through the bank statements in detail and understood the purpose of every transaction. In my understanding, this is the key to producing the most accurate accounts - I'd certainly rather he did this than draw conclusions from a number of (perhaps naive) assumptions I'd made.

Max - please keep your responses constructive - this isn't the General forum.

[max]

Why?

Serious question, what advantage do you gain from recording this?

autistic disorder? Like the Rainman perhaps? Called "Savant syndrome". "Formerly called idiot savant"


http://rarediseases.about.com/cs/neu...s/a/052502.htm

or perhaps

http://en.wikipedia.org/wiki/Obsessi...lsive_disorder

The need to account for every transaction, even is has no meaning outside the mind. Hopefully the accountant will help.

[blacjac]

If money moves between the current and reserve accounts, I'd be inclined to record this in the books like any other transaction.

In my mind, the more accurate your books are, the better a job the accountant can do of your accounts, and the less likely you are to be investigated and/or suffer ill effects as a result of an investigation.

Why?

Serious question, what advantage do you gain from recording this?

[BolshieBastard]

Try using another bank - and end up paying account charges!

[pjclarke]

Cater Allen

Cater Allen do not seem to have changed their rates. The Reserve Account (30 free transactions/month) currently pays 3.2% APR on >10K and 3.95% on >50K

http://www.caterallen.co.uk/Interest...lt.aspx?pid=10

4.95% is available on a 30-day notice account.

[ladymuck]

I've seen both done. I used to manage the bank accounts for a rather large company and their sterling deposit account was used to sweep funds into/out of each day. No transfers were recorded in the books between that account and the current but come reconciliation at the end of each month, the balances of the deposit and current accounts were combined and treated as one account. Never had an audit issue with that and it saved a lot of admin time.

Alternatively, I have seen deposit and current accounts treated as entirely separate entities and all transfers between them duly logged.

My hunch is that there is no 'correct' way as long as everything balances and is clearly auditable.

[Lewis]

If money moves between the current and reserve accounts, I'd be inclined to record this in the books like any other transaction.

I disagree. You only need record money into COMPANY and money out of COMPANY not bank accounts, as it happens if you only have one bank account this is the same thing. If you have more than one, you can move money around between company accounts with no record keeping required. At least that's what I do. I of course ensure all the balances add up to the correct amount each month.

[chicane]

All he cares about i2 the total amount of money I have got and the incomings / outgoings.

Unless your accountant control.s your bank accounts. Which sounds more like and MSC than an accountant to me......

If money moves between the current and reserve accounts, I'd be inclined to record this in the books like any other transaction.

In my mind, the more accurate your books are, the better a job the accountant can do of your accounts, and the less likely you are to be investigated and/or suffer ill effects as a result of an investigation.

[blacjac]

Yep - just waiting for the accountant to call back so that I can find out if doing so is still worthwhile given the potential of extra book-keeping effort and accountancy charges.

I suspect what you suggest is what Abbey are angling at by reducing the interest on the business current account to such a pitiful figure.

I fail to see what extra book keeping effort or charges there would be.

I constantly swap company funds between current and reserve accounts.
My accountant has no idea that I do this, nor is it any of his business. All he cares about i2 the total amount of money I have got and the incomings / outgoings.

Unless your accountant control.s your bank accounts. Which sounds more like and MSC than an accountant to me......

[max]

"Bank of Scotland" is a different organisation to "Royal Bank of Scotland" as far as I know.

http://www.totalbusinessaccount.co.uk/?intsrc=promo1B

my mistake..missed that one. Doh.. normally referred to as HBOS.

[chicane]

which RBS account is that?

"Bank of Scotland" is a different organisation to "Royal Bank of Scotland" as far as I know.

http://www.totalbusinessaccount.co.uk/?intsrc=promo1B

[max]

FYI

I get 5.38% APR on balances above £1 with Bank Of Scotland.

which RBS account is that?

[max]

Yep - just waiting for the accountant to call back so that I can find out if doing so is still worthwhile given the potential of extra book-keeping effort and accountancy charges.

I suspect what you suggest is what Abbey are angling at by reducing the interest on the business current account to such a pitiful figure.

Keeping money in a reserve is standard practise. If your accountant wants more money it'd be time to get a new accountant.