How to Manage Your Business Finances

Today I want to talk about how to manage your business finances. I’ve got a very special guest to introduce you to, but the first thing I want to ask you is to let me know in the comments:

What’s the one thing that aggravates you about business banking?

This is definitely one of the areas that I really struggled with when I first set up my business four and a half years ago, because I felt really quite lost with:

Where do I bank?
Do I have a separate account?
Do I just keep it on my personal accounts?
Who do I open that account with?

And I actually had quite a poor experience with another bank in the early stages of setting up the business. It’s complicated enough when you’re first starting out! So I really want to hear from you – What’s the one biggest challenge that you have with business banking? I’d love for you to share with the community your experience of your own business finances.

Today I want to introduce you to Starling bank. For those of you that have been listening to the podcast, or followed me, for some time will know that we have partnered with Starling bank recently. They are now sponsoring our podcast, which we are incredibly grateful for. Starling really changed everything I do about managing my personal finances and my business finances. They’ve been really pivotal, not just in the practical ways of managing money, but in my own relationship with money.

Starling Bank were really pivotal in helping me, through the features that they offer, to get out of debt and manage my money very differently. When it comes to business finances in particular, sometimes we don’t pay enough attention to the business finances because we’re more comfortable to look at the personal stuff, or maybe the other way around.

Today I’m talking to the head of business banking at Starling bank, Symmie Swill. She’s going to share with us some information about the journey of Starling bank, the kind of accounts and businesses that they support, and talk you through some of the features that they have available that can support you in your business finance journey.

Jump to:

What is a challenger bank?
What kind of businesses can open a Starling account?
What features do Starling Bank provide for businesses?
Can a Starling business account save you money in your business?
Implementing Profit First with a Starling business account
How does the application process work?
What if you have an existing business account elsewhere?
Tips to manage finances in your business
Open a Starling Business Account

Hi Symmie, thank you so much for being here with us.

Hey, Catherine. It’s a pleasure to be here. I’m a big fan of your podcast.

Thank you so so much. Symmie, tell us a little bit about your journey and working for Starling bank.

I joined Starling about a year ago to head up their small business banking area. Before that I worked in investment banking. So on the other end of the banking spectrum. I also previously spent eight years advising entrepreneurs and medium sized businesses on how to grow their business, raise money, sell businesses, buy businesses, and really think about their overall banking strategy. Then I moved into strategy and operations to say, “Well, actually, how do we use technology?” How do we build the right products in order to support our small business customers.

It’s really a privilege and an honour to work at Starling because now I’m not only helping entrepreneurs and our customer base, but it’s also great to be working in an entrepreneurial fast moving female led banking environment. So I’m getting the best of both worlds there.

I can’t believe about two years ago I read a statistic that said that it wasn’t until the 1960s that women could actually have their own bank account. And now we’ve got CEO of Starling Bank Anne Boden, a woman who has created this incredible online challenger bank, and is now as you described there, leading this space from a female perspective. I just think that’s incredible that less than 60 years ago we couldn’t even open our own bank account.

I think representation really matters. So it’s fantastic to have and not only start a bank, but lead it. And a large number of her management team are female. It’s such a big difference from what I had when I started where I was basically the only woman in a team of 20, and then the only woman in a team of 50. So it’s fantastic. And I think it makes a big difference for female entrepreneurs as well, to see that they’re being supported.

It really does. Our new strapline on our podcast is “Are you ready to be that wealthy woman?” A lot of women don’t feel like they can be role models or leading role models in their businesses. We often hold on to a lot of guilt and shame that we can even run successful businesses. So it’s great to have Starling bank really pioneering some of that change.

Symmie, when I talk about Starling bank, I talk refer to them as an online challenger bank. What does that actually mean? And how does that compare to a typical High Street bank?

We’re trying to position ourselves not just as a challenger bank, we’re trying to position ourselves as a real bank that happens to be just doing everything easier, fairer, and better for you. There’s two main differences:

The first main difference is what you can see on the outside. So free accounts, no monthly fees, easy, quick setup, we don’t have branches, everything is on your phone or online. Everything we do is to make banking a lot easier and quicker to do, and much more intuitive.
And then the second thing is what you don’t see. How we organise ourselves and how we think about the customer. So our entire organisation is customer first, and it’s digital first. We’ve built all of our tech and we’re constantly changing things every single day, tweaking things in response to customer feedback. And that means that we can be really innovative, really nimble and move quickly.

So it’s not just the features you see today that make us different from the high street, but also what you’re going to continue to see and how we can continually evolve and make things better for you to run your business.

Click here to explore Starling Bank business account

Yeah, I love that innovation piece. There’s a lot of businesses out there that will be reading this wanting to create more innovative ideas and concepts themselves. Then to actually have that available through the way that we’re managing money, I think is really clever.

Technology, whilst it has its challenges sometimes, definitely enables us to have more readily available access to things. To be able to speak to somebody for example – the number of times I’ve gone into my Starling app and just spoken to somebody within a couple of minutes. I was having a conversation with a traditional high street bank over in Jersey the other day which I won’t name, but it took me three days to get through to this particular department to get any assistance.

So I love how Starling are embracing using that technology to be able to help to support customers in their businesses.

That’s been a really important part of how we’ve thought about it. We have UK based 24/7 customer service and we think that’s a really important part of convincing people to take that leap.

For a lot of people it is scary to get rid of their traditional bank. So it’s not only the customer service we have in the app, but if you do have any questions there is someone real at the end of the phone, or the chat, or the message in the app. So yes, it’s a big part of what we offer.

Yeah, amazing. And they’re super friendly too! What type of businesses do you specifically support at Starling Bank?

We support sole traders as well as supporting limited companies and limited liability partnerships. We can support charities that are registered as limited companies, community interest companies.

But in terms of types of businesses, we have everything from pharmacists, to lawyers, real estate agents, electricians, hairdressers, I think we have carbon neutral paints, business, some vegan snacks, and of course technology businesses, consultants, and anyone in between!

People sometimes think that we’re really just for tech enabled customers, but we have people from kids to people in their 90s, and anyone in between!

How do the older generation respond to managing their finances using an app?

I think a lot of the older generation have learned, particularly over the last year, how to work technology. WhatsApp and FaceTime to see their grandchildren. When you’ve been shut away, or shielding, it’s been really helpful to be able to do things on your app.

A couple of weeks into lockdown last year we actually released a connected card, which meant that anyone that was shielding could order additional cards for free and load money onto them. So people could go and help them with their shopping, whether it’s neighbours or friends or volunteers.

Those are the sorts of features that people who were older said encouraged them to get the app.

Yeah, that’s great. Are there any specific features that you provide within the app within Starling Bank that perhaps differ from the traditional High Street banks?

It’s a lot more intuitive and easy to use. We have the spaces feature, which I know you love, which makes it really easy to divide your money up. Pay your profit first, keep money aside for investments, or VAT and tax.

On online banking, we also have the business toolkit, which allows you to take care of all of your financial admin outside from and around your business banking. So you can set up an invoice within the bank account, send it out by connecting in your email, and then when people pay you, it automatically matches up as well.

You can do your VAT, and you can do your tax there as well, and keep a list of all of your bookkeeping, attach digital receipts, and basically organise your financial affairs all within your bank account, which I think is really different and really special.

Does that save business owners then from using software like Xero, or software that they’re maybe paying additional money for?

I think for some businesses using our toolkit is probably cheaper and does all the same things that they need from those from the applications.

There will be businesses that as they grow, it makes more sense for them to use something like Xero or QuickBooks. And for them we have automatic, instant real time integrations with those accounting platforms, which is actually really valuable. And probably one of the most valuable features of the accounts.

That means that while you’re doing everything that’s running your business, your financial transactions are automatically updated into your accounting software, so there’s no need for reconciliations, you don’t need shoe boxes of receipts, etc. We’re really thinking about how do we make your business account part of enabling you to grow your business, rather than it being a task in and of itself.

Yeah, that’s a really interesting point.

I must admit, I haven’t really explored the business toolkit yet myself. We do integrate though our Starling account into Xero, so everything just automatically feeds through which is fabulous. It saves my accountant a whole bunch of work!

And to touch on the pots facilities – within the app itself, we have these spaces which I call money pots. You can put pictures behind them, you can give them specific names, you can put goal target amounts on them. You can automate them so that money goes into them automatically each month, or you can do it manually. And I just think it’s such a revolutionary way of managing money in your business.

If you haven’t listened to my previous episode talking about the profit first model, we’ve interviewed Mike Michaelowicz who is the owner of Profit First. The Profit First model for me is a game changer because it forces us to forward think about how much am I going to have to pay for VAT this month or this quarter? How much of it is going to be taken away for tax? And how much of it do I want to safeguard for profit?

It gets you forward thinking. So rather than budgeting, which is all very much about looking back into the past, looking at what have we spent and then quite frankly just beating ourselves up for the fact that we’ve overspent, it forces you to be forward thinking in your business.

I think for a business owner, cashflow forecasting and predicting what might be ahead is something that a lot of people get really scared about. In my pots, for example, anytime money comes in (and I do this daily which is a bit excessive, I know) straight away I put 10% into my tax pot, 20% into my VAT pot, and the rest goes into my profit pot. Then I leave a floating balance in my main account to cover all my direct debits, etc.

That forces me to think about paying myself first, and also moving money aside for tax and VAT, so you don’t get that scary notice at the end of the tax year when you’ve got this huge big tax bill to pay which forces business owners to then feel in a struggle mindset.

So I just love how you pioneered this. I really do consider you guys to be complete pioneers in the whole way of mental accounting, and the psychological side of money and actually making it so easily accessible to your business owners.

It’s really nice to hear, I think the spaces are my favourite feature as well, they’re so easy to use. And I think it really transforms how people feel about their accounts in that you feel it’s an easy way to feel very much in control. We also have spending analytics to categorise your expenses. So when people flip through the app and see those in combination with being able to plan ahead with the pots, it’s a really easy way to feel that you understand your finances, and you can make good decisions about your business without fancy spreadsheets or really worrying about it too much.

Yeah, I mean I do have one spreadsheet in my business, but that’s literally because my ops manager was almost like, you have to have this Catherine! And I was like, “Okay, I will embrace the spreadsheets!” But other than that I can go into my spending, and I can go back to last month, and I can see exactly under each category: Marketing, VAT, Staff, Admin, Workplace, Food & Drink, Travel, Equipment. I can literally see what I’ve spent every single month in those categories.

It’s really useful to know where you’re leaking money in your business categories. So I know for example marketing was my highest spend last month. That’s fine, because we’re investing a lot in marketing right now. But if I’m looking at those categories and thinking there are a few coffees that have gone through there that maybe I could have saved and that could have gone into my profit pot and be put towards a specific purpose, then it’s really empowering to just have that information at your fingertips.

So how does the application process work? If somebody wanted to apply for a business account, how would they go about that?

So everything’s in-app. There’ll be two parts to that process; we will ask you as an individual to upload your ID and do a short video, and then we will ask you questions about your business.

We’ve put a lot of time into trying to make that process feel like you’re talking to a person. So you’ll be asked to please describe your business. And we’ll ask for a little bit of evidence, that may be your experience, what you’ve done previously, or your trading activities and contracts. If you’re a startup, we’ll ask you to give us as much as you possibly can. For example a business plan or evidence that you’ve done something similar before.

And then you will have a person review this. You might be asked a few questions, and then hopefully very quickly, you will get your account.

Yeah, it’s so easy. I love how you just very quickly said “a little video of yourself”. Some people will be thinking “What? You have to queue up in a bank for like 16 hours to get an account!” It’s so different, isn’t it?

It is. For a lot of people that’s the moment where they realise how different their experience is going to be, because a lot of people just assume that the way they’ve always done things is the way they’re always going to have to do things. Like I said before, a lot of our time is spent challenging things. Why does this process happen? Why do we have to have you speak to a person for this? Why do you have to go through all of these hoops and paperwork? Actually is there a smarter, faster way to do it, that actually gets the same customer result?

And in that application process, what happens if somebody has an existing business bank account elsewhere, and they want to move everything across to it to Starling?

If they have an existing bank account elsewhere, they’ll still have to go through the process of setting an account up with us. So we are a bank, and there are certain requirements we have to do to make sure we understand who you are and what you do.

But we’re also a member of the current account switching scheme, which means it’s very simple once you’ve got an account open with us to switch everything from that previous bank across. Direct Debits, Standing Orders and that takes around seven days. There’s a guarantee that everything has to switch.

The switching scheme is really helpful in terms of getting people comfortable to change accounts, because a lot of people have been with their account provider for years. It’s quite a big thing to decide to open a new account, so the easy onboarding process helps you get over that hurdle. And then the fact that you’ve got that ability to switch everything really quickly takes away those obstacles, and takes away that admin.

Click here to explore Starling personal account

I’m so glad you mentioned the current account switch service, because a lot of people think about switching their bank account, and then just think it’s going to be an absolute headache and a nightmare, and then it stops them from making that decision. With that switch service, you’ve got that seven day guarantee, so it’s just so easy then to consider moving your account from one bank to another.

I mentored and coached a lady about two years ago who had this big fear of switching bank accounts because her relationship with money was very much influenced by her mum and her grandmother. Her grandmother actually set up her first bank account, so she felt this real allegiance and loyalty to the particular bank that this account had been set up under.

It was really interesting to explore that with her, what was limiting her or stopping her from moving her account, even though logically she knew it made more sense to move it.

Then we talked about the fact that Starling was founded by a woman, and all of a sudden she was like, “Wow, it’s safe for me to move my bank account!”

So it’s interesting, we can sometimes have an emotional connection to where we store our money. Sometimes we have to challenge those beliefs. Is it true that we have to keep our bank at the same place for the whole of our life? Or is this an opportunity for you to think about the features and benefits you get with your bank?

Make a list of all the things the benefits you’re getting from your current bank, and question if they are valuable to you. Is it valuable for me now at the stage I’m at in my business?

I know that one of the other features of Starling is the Starling marketplace. And I think this is fabulous. Could you just tell us a little bit about what the Starling marketplace looks like.

The marketplace just allows you to integrate the account with other products and services that you may be using to run your business successfully. The main ones are obviously the accounting integrations: QuickBooks, Xero, FreeAgent, and some other popular ones are point of sale payments like Zettle and Sum Up. If you’re running a retail business, it means that you’re instantly getting that transaction information through the app.

We also have things like integrations with Slack. So if you have a finance team, you can get notifications into the Slack channel. We have integrations with insurance companies and legal firms.

We are really trying to think about what our business customers need from a more holistic perspective, and how can we be smarter around using your current account to integrate with some of those other products and services.

I did not know about the slack integration.

It’s quite cool. So it will just put notifications into a Slack channel. So if you need other people to be aware of those payments, they’ll find out when you find out. The integration will give them a notification of that information without them having access to the bank account. They’ll just see that the payments happen, they won’t have access to the account.

Currently only directors can currently have access to the business account, which is something we’re working on. Because we know as our customers grow, that they do need teams to be able to access the business account in a secure way.

That’s great to know about what might be coming.

Finally, then Symmie, if anyone’s reading this and they’re interested to hear from the head of business banking, with your experience and expertise, what tips would you leave our readers with today that would help small business owners in terms of managing their finances?

The main one is probably one you wouldn’t expect from a business bank! Just be really clear about what the purpose and objectives of your business are beyond the financial.

For us, the bank account is really there to enable you and your finances. To enable you to achieve your objectives and your goals as a business. If you take the time to think about what you’re trying to achieve as a business, it’s a lot easier to make those decisions about priorities. What pots do you set up in your account?

Know what you’re trying to achieve beyond the financial.

Some more conventional tips would be around being organised.

Putting some good habits in place. Invoice immediately, check your account regularly.

The bookkeeping feature in the toolkit makes it easy for you to upload your receipts, and manage your finances as a habit rather than whenever you happen to look at the account.

And the final one is to try to find a network of other people to learn from. Whether that’s people that you’ve worked with, or met, or whether it’s things like listening to podcasts.

We have a blog where we have some of our customers talking about how they use the account, what tips and tricks they have. And also some various features and articles around how to manage your finances better. We’re really trying to provide a bit more of a network around our customer base on our website, so we do encourage people to check that out.

Oh, that’s fabulous. We write a blog ourselves as well, and have a fab article on The 15 Minute Exercise to Change the Way You Manage Money in Your Business, and I loved how you talked there about giving every pound of purpose.

This is one of our golden rules – getting financially naked, understanding your numbers, and then actually giving every pound of purpose so that you can bring it back to more than just the numbers. It’s not just about the money, it’s about what that money brings to you that makes all the difference.

If anybody wants to know more about opening up a Starling account, where would be the best place for them to head to right now.

The website will have more details on how to sign up. You can also obviously just download the app and go through the process immediately.

There’s lots on our website around the best features, how to use us, and like I said, there’s a blog on there as well which provides useful information for small businesses.

Thank you so much Symmie for coming to spend some time with us today to talk about how we can manage business finances. Thank you so so much for your time and your wisdom. It’s been an absolute pleasure to talk to you today.

Thank you so much, Catherine. It’s been a lot of fun.