Business bank account: Why might you use one?
22 May 2020
Many small business owners use their personal bank accounts for their business dealings – and why not, you may wonder? Having two accounts may seem like more time and effort, but it could really simplify things. Here are a few ways opening a separate business banking account could benefit you and your business.
Business bank accounts often offer similar features to personal accounts, but a business bank account will be opened in the name of your business entity. This could add credibility and legitimacy to your business; invoices made out to ACME Widgets may look a lot more professional than those made out to John Smith’s personal account.
Operating with a business bank account could also help you to increase brand awareness, and could help customers and suppliers identify you more easily when it comes to billing and online transactions.
Low or no fees
One perceived benefit of using a single account for both your personal and business finances is that you'll minimise fees. But there are business bank account options with low or no account-keeping fees. Take our Suncorp Business Premium Account for example. You’ll get unlimited fee-free withdrawals a month, plus we’ve removed account keeping fees on all Suncorp personal and business deposit accounts – forever!
Prepared for business growth
Lenders may need to see your business finances if you ever want to apply for a loan, or obtain finance to grow your business. Having a clear account of your business by having its recorded transactions separate from your private ones could make preparing your loan application easier and might save you the effort having to do it down the track.
A separate business bank account could help you organise your books more effectively. Your business transactions would be recorded in the one spot, and you’ll have a proper record of funds received and payments made in the business’ name.
Also, having a separate business account could make bookkeeping a lot easier if your business starts using accounting software. Many accounting packages such as Xero and MYOB integrate directly with your bank account, automating most of the bookwork.
Simplified tax time
Having a clear record of your business’ finances could make a big difference come tax time. Not only could it help you to meet your tax and reporting obligations, it’ll also be harder to miss any deductable expenses. Plus, if you have an accountant, they might start charging you more for all the extra time it takes to weed out your personal transactions from your business ones.
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