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Why you should separate your personal and business banking, now!

There’s one thing small business owners are always short of – time.

Making sales, ordering stock, managing staff, doing the books and the banking; there just aren’t enough hours in the day (or night for that matter). So, where there are opportunities to save time, grasp them with both hands.

On the topic of banking, spending a little time now to separate your personal and business bank accounts can save you a whole lot of time and money later.

Ready for a tenuous analogy?

Think of your accounts like the curry place at your local food court (stay with us). Sure, you can load up your plate with a choice of tantalising curries, but after a couple of hungry scoops it becomes a confused combination, one curry indistinguishable from the other. Ingredients, carefully chosen to produce a particular flavour become, well, a bit weird.

That’s what happens when you mix business and personal transactions in one account. No amount of roti will mop up that mess. Keeping your business transactions away from your personal accounts is the smart way to manage your money.

Save more than just time

Cast your mind forward. It’s BAS time.

Imagine wading through hundreds of deposits and withdrawals made to your personal accounts in search of your business-related transactions. That’s hours of your time wasted. If you hire a bookkeeper or accountant to do your BAS and tax, that could mean hundreds of dollars flowing out of your account and into theirs.

A separate business bank account for your business transactions avoids that expense. And account-keeping fees on business transaction accounts are tax deductible (not that you’ll find any on a Business+ Account).

A separate bank account for business transactions also helps you avoid mistakes that can have implications for your personal and business tax returns.

Smarter business from the start

If you’re looking to start a small business, the decisions you make now can affect how you manage and succeed later. How you set up your banking is an important element.

Your business banking should give you a clear overview of your income, expenses and (hopefully) profit. Armed with this information you can make smarter choices about how you spend and invest your business’s money.

Down the track you might consider a business loan to help grow your business. Well-organised accounts are a fantastic foundation for an application and will help your lender understand the position your business is in.

Not to sugar-coat it, keeping your business and personal accounts separate is simply more professional. It’s easier to set up your business banking properly now, than to untangle the jumble of transactions later.

Easier cash management

Cashflow is at the heart of every small business and a business transaction account is perfect for making and taking payments. You can clearly see what’s come in and out of your account with online or mobile banking.

Another advantage of maintaining a stand-alone business bank account is your ability to link a business overdraft. If cashflow gets tight, a business overdraft gives you access to funds to pay staff, suppliers and a host of other business expenses.

If you need to put money aside to pay tax or GST, or better still find yourself in a position to save money, consider a business savings account (or two or three). You can park your money for a rainy day, earn interest to build your balance and access your funds when you need them.

Ready to set up a business bank account?

If you’re convinced it’s time to separate  your business transactions from your personal ones, open Great Southern Bank’s Business+ Account in the Business app. With a fast, easy, and paperwork-free application, you’ll be on the right track in just a few minutes.  And, once it’s opened, you’ll enjoy no monthly account fees and unlimited free electronic transactions.

Now your business banking is in order, pass the butter chicken.

For everything you need to know about running a successful business, visit our online Business Hub.

1 For a full list of fees, please refer to the Schedule of Fees.

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Your pocket-sized business partner

For too long, smaller small business owners have had their unique business banking needs overlooked.

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Whether you’re striving for global domination, or you’re blissfully content as a sole trader, the Business app makes small business banking easy.

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General Advice Warning

The information provided here is general advice only. We haven’t considered your financial circumstances, needs or objectives. You should ask your Tax Advisor or Accountant before you decide about products mentioned in this article. All care has been taken to prepare this content, but no warranty is given for the information provided. Neither Great Southern Bank or its related entities, employees or agents are liable for the decisions or actions you take because of this information.