When opening your own small business, there is a lot to do. Once you've settled on a business name and set up your ABN, it's a good idea to to set up a business bank account. Not only will a business account make it easier to manage your finances, it will help you maintain a level of professionalism when dealing with suppliers, customers and clients.
Why is it important to separate your business and personal banking?
Opening a business account for your small business is an easy way to keep track of your business's finances and ensure they're kept separate from your personal finances. If you run a partnership, company or a trust, you must have a separate business bank account for tax purposes. Sole traders, on the other hand, aren't legally required to separate their banking. But it might be a wise decision to make managing your finances easier. Having a separate bank account for your business banking can be useful for:
Managing your business's cash flow and expenses Maximising your tax deductions at tax time Simplifying your book keeping for yourself or a tax agent
A business bank account can also be linked to a business credit card or an overdraft account.
What do you need from a business bank account?
If you just need to make regular deposits and withdrawals, a standard business transaction or business savings account will be sufficient. But if you need additional services, merchant facilities or an EFTPOS machine, debit cards, make sure your chosen financial institution offers these services. If you're dealing with overseas transactions, make sure your financial institution can manage this and that you understand what the associated fees and costs will be.
What makes a business account the best?
There's more to a bank account than a high interest account. But what should you consider when comparing your options?
Interest: Interest rates on business accounts can sometimes vary depending on the amount in the account. A higher interest rate isn't always the best option Account fees: Consider how much monthly accounts fees will cost you. It's also wise to factor in how much dishonour fees, over the counter withdrawals and deposit fees and replacement debit card fees will cost Features: Some business bank accounts come with business credit cards, business loans or a business overdraft account. Depending on the type of business you run and the size of the funding you require, it's important to know which features you'll require access to
What's best for your business might not be for others. Make sure your business goals align with your banking to ensure it's the best option for you. To help you get started, we've pulled together the latest business bank accounts on offer with InfoChoice.