Opening A Business Bank Account

Opening A Business Bank Account

Opening A Business Bank Account
Having a business bank account helps you set a streamlined process for managing your business income. Going through the procedures of opening a business bank account can be confusing, especially if you are just starting out. When you make a well-informed decision, it will do a lot of good to your business.

Why Should You Have a Separate Bank Account for your Business?
There is no legal compulsion to have a separate bank account for some business structures. However, having one helps you in the following ways:

  • A separate account conveys professionalism to your business employees and clients

  • A separate business bank account gives a clear picture of your business income and expenditure

  • It is easier to monitor and manage funds related to your business

  • It is easy to retrieve business financial information for tax purposes


Is a Bank Account Essential for your Business?
Businesses with a sole trading model are not legally obliged to have a separate business bank account. If you are a sole trader, you can use your personal account for your business funds. In this case, your cashbook should clearly demarcate between payments of a personal nature and business funds.
Businesses operating in a company, trust or partnership structure require a separate business bank account by law.

 

How should you Go About Opening your Business Account?

  • Outline your business banking needs. Talk to your accounts department and financial advisor to understand the type of accounts and banking products that would be helpful for your business.

  • Approach banks and other financial institutions with your banking needs. Ask about their expertise in dealing with the banking needs of a business such as yours.

  • Examine the transaction banking products of the institution. A business transaction account is essential to manage the daily inflow and outflow of funds. A savings account holds business cash and fetches interest.

  • Efficient transaction banking enables you to have a clear picture of financial flow and helps you make well-informed monetary decisions. Check for the availability of the following common facilities in a transaction banking account:
              1.     Multiple access to business accounts, including through cheque, ATM, phone, Internet, and EFTPOS
              2. BPAY compatibility
              3. Speedy access to cheque book
              4. An efficient payroll processing system 

  • Include merchant facilities to make it easier for your customers to do business with you. For example, you could enable your customers to pay for your products or services through a credit or debit card, instead of cash.

  • Including merchant, facilities contribute to greater cash flow as it encourages purchase in non-cash-carrying customers. In addition, you get access to funds quickly. You could tie-up with a merchant facilities service provider directly or through your bank.

  • Seek a one-person contact at the bank so that you always have a resource to help when in need.

  • Talk to your in-house financial expert before deciding on a financial institution.

  • Remember to read the Product Disclosure Statement or PDS thoroughly before associating with any financial institution. Have the document verified by your financial expert?

View All