It might be a surprise to learn that – as a sole trader – it’s not a legal requirement to have a dedicated bank account.
I didn’t have one for years because it seemed like an unnecessary complication. When I started freelancing, most banks charged for business accounts, but these days there are lots of free options.
The main benefit of a separate account is that everything in there is business-related.
That may not sound important, but if your personal and business expenses run through the same account things get complicated quickly. At tax-time, you may have thousands of transactions to trawl through.
Another consideration is that using a personal account for business transactions is against many bank’s terms and conditions.
More thoughts on keeping business and personal finances separate in this article.