Business Banking Accounts
So you’ve made it to the big leagues! You’ve started your own business and are hopefully making a lil (or a lotta) money. However, if you’re using your personal bank accounts for business purposes, it can quickly become hard to track which transactions are personal and which are business related. The good news is that you can sign up for a business bank account to get a range of great features and make your life a whole lot easier.
Banks usually offer a range of different kinds of accounts and services for businesses that include transaction accounts, savings accounts, credit cards, loans, insurance and more. They’ll have a variety of options depending on how big your business is and what kind of business you are, so do some research and compare your choices.
Generally speaking, businesses should have two bank accounts – one business transaction account with a linked debit or credit card, and one to set aside money for tax and GST liability (basically, the money you owe to the Government).
Here’s why business banking accounts are a good way to go.
A major benefit of having a business bank account that is separate to your personal bank account is the ability to track transactions. Having a business bank account means transactions are automatically separated from personal purchases, which makes keeping track of your business expenditures and income a lot simpler. This means less time spent doing accounting and more time focusing on business operations. It’s especially easy to keep track of your transactions when they’re conducted electronically, so it might be worthwhile to consider how you could do this in your business.
Opening a business bank account could also give your business more credibility and legitimacy. A business bank account can be opened in the same name as your business, and therefore makes it easier for customers to identify you when dealing with billings and online transactions.
Having a separate bank account for your business also makes it simpler to claim tax deductions relating to your business, as the tax office can clearly see your transaction history. Having a business bank account also makes applying for a business loan easier, as the account has a clear record of transactions related to the business’s operations.
This information is intended to be general in nature only and might not apply to your personal circumstances. When in doubt always seek professional guidance.