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I tell all my clients that if you are running a business, no matter what your structure, you simply MUST HAVE a business bank account.

When I say running a business, I mean those people who are running an operation with the intent to make a profit, with the intent that this “business” be their source of income, that this “business” be a long term operation and that the brand will grow and develop.  I am not talking about hobby business owners.

I often get clients tell me it is not necessary to have a separate business bank account, that it costs money, that there are not benefits….well here is my view:

1. PROFESSIONAL – Business bank accounts look more professional.  The bank account can be in the name of the business trading name – rather than your individual name – which is particularly important for anyone operating as a sole trader.  As your business grows, and you bid for larger clients – they will see your operations more like a business if you have a business bank account.  Paying money into a personal account (from a big customer viewpoint) – can appear like you are not serious about your business.  People judge you on all kinds of things – don’t give them a reason to doubt how serious you are about your business.
2. BANK FEEDS – Many cloud accounting software now advertise that bank feeds can save you time (and ultimately money).  However, linking  a personal bank account will not save you time.  It will create extra work for you.  Why ?  You will need to account for every transaction in that bank account – which can include trips to Safeway, Coles, the doctors, personal shopping, Gym membership – the list goes on.  Why would you create work for yourself?  If you have a separate business bank account – you link that account – and you know that all transactions in that account are business related.  There is no chance of not accounting for everything.
3. CASH FLOW – Having a separate business bank account helps you to keep track of your cash flow easier.  This is because you can instantly see what the balance is in your bank account for your business operations – and it will help you determine if you have enough money in there to pay your payroll obligations, Superannuation obligations, GST obligations, whether or not you have the cash to invest in new equipment.  Whilst this should not be the only consideration when making big decisions – having your business funds in a separate account will greatly assist.
4. WORTH THE MONEY – Business bank accounts CAN cost money – there CAN be a small fee each month, however that fee is minimal (usually under $10 depending on your bank). If you are worried about the fees – then by all means you can shop around.  I, however, advise to go to the bank where you already have accounts – if you are a valuable customer they might do you a deal – it is worth asking.  Regardless of the fee – I truly believe it is worth it for the 3 points listed above.  Some things in your business life are simply worth paying for.

So if you don’t already have a business bank account – what are you waiting for.  Put it on your to do list now…and go and speak with your bank this week.
Then if you need help with bank feeds or choosing software that will work for your business to streamline your bookkeeping process – we are here to help.