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App Only Based Bank Account for the Practice

Will it work?

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Hello

Santander business account app is well behind times. Further, the bank keeps blocking my account for security reasons. 

I am planning to move my practice bank account to Starling bank. If you have an app-only business bank account for your practice, does it work? 

Are they any downsides? I do not see any as compared to high street branch-based banks.   

Thanks

Replies (22)

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By johnt27
02nd Mar 2021 13:04

Yes, it does

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Melchett
By thestudyman
02nd Mar 2021 13:19

Not really any downsides. Starling is very good for business and personal - they are the more mature of the two major app based banks (Monzo the other) plus they are actually profitable!

Starling also has a web interface - this might be for personal accounts only. But its a nice feature.

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By paul.benny
02nd Mar 2021 13:40

The downsides of app-based banks seem to be that they only allow for single authorisation of payments and that there is no facility for view-only access.

That may be fine for the smallest businesses but not when you reach a scale where a degree of internal control is required - such as segregation of duties is required or you require dual approval of payments.

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Replying to paul.benny:
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By Jpbuckley8
03rd Mar 2021 09:48

This is a big issue for us and clients we refer to Starling. It’s been difficult opening “traditional” bank accounts during covid so we have guided clients towards Starling.
The only work around we have for approvals is to use Transferwise and Xero’s supplier payments process to force a layer of approval before payments are made.
Clients seem to like the automated process of paying suppliers so it’s worth investigating

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FirstTab
By FirstTab
02nd Mar 2021 16:12

Thanks for the response.

I am impressed with digital (app-based) banking. Being a small practice, it meets my needs.

I am going ahead with it. I should have done it earlier. Big brands apps are not there yet.

I am moving both the personal and business account to Starling.

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By JD
02nd Mar 2021 16:51

The downside tends to be with secondary access (by employee/office manger or the like) to make payments etc. Last time I looked it could only be a director.

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A Putey FACA
By Arthur Putey
02nd Mar 2021 18:00

A downside perhaps is that the online banks don't tend to be signed up for the Confirmation of Payee system so your customers will get a security warning when attempting to pay you. A client of mine who has mostly B2C clients tells me its a real pain because its easy for payers to misinterpret the warning and think something is wrong. In one case a customer refused to pay to that account and the director had to have them pay to their personal account with a mainstream bank.

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Replying to Arthur Putey:
FirstTab
By FirstTab
02nd Mar 2021 18:10

Hi Arthur

Thanks. I just checked, Starling does have COP.

https://www.starlingbank.com/blog/confirmation-of-payee-what-you-need-to...

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Replying to FirstTab:
A Putey FACA
By Arthur Putey
03rd Mar 2021 08:54

I checked back, this client uses Tide.

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Replying to Arthur Putey:
Pile of Stones
By Beach Accountancy
03rd Mar 2021 09:36

I used to be with Tide, which was fine until a client sent me a cheque...

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Stepurhan
By stepurhan
03rd Mar 2021 08:33

Starling have no ability to allow someone else to set up payments for you to authorise later. You will either haeve to grant full access or deal with all that yourself.

They are also unable to offer credit cards (they announced a plan to do so a couple of years back but I have it on good authority they cannot get legal authorisation to do so). As most other credit card providers currently require you to have an account with them, you may have to do without that option.

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Replying to stepurhan:
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By johnt27
03rd Mar 2021 08:50

There is, of course, a 3rd way - use one of the many payment systems that are available if you need someone to make payments on your behalf.

And, as for credit cards I don't have, and never have had, one with any of the banks I hold/have held current accounts with. Plenty of non-bank affiliated credit card providers who would lap up an accountants business.

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Replying to johnt27:
Stepurhan
By stepurhan
03rd Mar 2021 09:21

Care to share more details? Both would be useful to me.

I am aware of other services that enable others to make payments on your behalf (Pleo is one I have used) but most of them require you to load them with cash. So either you keep on having to load them with small amounts (negating the benefit of having to do little to authorise payments) or trust people with large amounts (negating the point of being able to control spending). Any system that resolves this problem would be welcome.

I did a search for credit cards, but only two independent ones came up in decent places on comparison tables. Do you know any that are independent but won't cost several limbs to use or come with other severe limitations (e.g. low credit caps)?

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Replying to stepurhan:
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By johnt27
03rd Mar 2021 10:00

Pay with Transferwise, Telleroo and Credec all good payment solutions with varying level of control/needs to be funded.

For cards - AMEX, Capital One, Barclaycard all ok. I always pay on time so potential interest rates charged are of a irrelevance to me. Credit limits are a personal thing, given they are linked to credit worthiness, but again never been an issue for me and to be honest I'd have to do really well to max out my cards!!

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Replying to johnt27:
Stepurhan
By stepurhan
03rd Mar 2021 10:39

Thanks for that.

By coincidence Transferwise (or Wise as they call themselves now) had just passed across my radar this morning. I was aware of them before, but didn't realise they could be useful for making domestic payments as well as international. I will also look into the others you suggested.

Re credit limits, one of the best buy cards I looked at had a pretty low max limit across all cards. As you say, credit worthiness will be the major factor on that usually.

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By lh3f9764bg1g
03rd Mar 2021 09:41

Many of our payments received come in cheques . . . . . Starling looked good to me but it seems to be difficult to lodge cheques (especially cheques over £500).

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By alipearson
03rd Mar 2021 10:38

We use Tide and have been really happy that we changed.
Whilst you can't pay in cheques but we use GoCardless for those clients who still use them (only one now) which seems to work well too.
Trying to get to the bank to pay in cheques was always a hassle and they're being phased out anyway so it seemed like a good time.

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By David Gordon FCCA
03rd Mar 2021 16:21

For security reasons most banks only allow one named person access to digital banking.

Also, whilst it is fine for clients to use, I do not think it meets ICAEW or ACCA practice requirements.
Especially as regards Clients' account, where the review inspectors expect to see a full paper trail.

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By North East Accountant
03rd Mar 2021 16:49

I wonder what any Icesave savers think of banking with an online only operation.

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Replying to North East Accountant:
By coops456
03rd Mar 2021 16:57

I was an Icesave saver. Thanks to the FSCS I got all my money back when they went bust. Their problems were entirely unrelated to being online only - after all, bricks-and-mortar Northern Rock almost went the same way.

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Replying to coops456:
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By North East Accountant
04th Mar 2021 08:51

Imagine you had more than the FSCS limit in the account though......

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By moneymanager
04th Mar 2021 11:45

When I last hecked neither PayPal nor Stripe would make payments into the likes of Tides, Starling etc.

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