There are a multitude of benefits that come with your own business bank account. For one, setting up a business account can make bookkeeping less of a headache — especially at tax time.
A business bank account also helps you stay in line with the relevant government rules and regulations. The Australian Taxation Office stipulates that ventures operating as a company, partnership or trust must have a business account for tax compliance. And, while sole traders don’t face the same requirement, a business account provides the same benefit of keeping personal and professional transactions separate. Once your business account is set up, you’ll have a clear path to sharing important information with your accountant or handling your tax obligations yourself.
Business accounts also give you a clear view of your business finances.
All of the relevant transactions are tracked in one place, making it straightforward to look at recent activity and identify any potential areas for concern.
Opening a business account also helps your company appear more mature and professional. While customers won’t notice the difference at the point of sale, they will likely see it when reviewing their monthly statement. The legitimacy a business account offers can also encourage suppliers and vendors to form a relationship with you.
When you hear the term “business bank account”, it’s usually in reference to a transaction account. This type of account is used to make and receive business payments on a daily basis. A business savings account is another type of business bank account, very similar to a personal savings account. These types of accounts serve as a place to deposit and hold money for longer periods of time.
Banks and other providers of financial services have a number of rules and security measures in place to make sure anyone attempting to open a business bank account is doing so in good faith — and is eligible to receive one in the first place.
The requirements for opening a business bank account are strictly defined but straightforward, at least as far as the highly regulated world of banking is concerned. You may be asked to provide a variety of documents and information to prove your business is legitimate and eligible for an account. This mostly involves things you likely have on hand right now or can quickly access, such as your company’s full name, Australian Business Number, and tax file number. The physical and registered address of a business are also commonly requested.
You will also need to identify key parties, including both company directors and any employees who will access the account. You, your partners, and potentially your staff may need to produce passports or a certified copy of drivers licences.
Opening a business bank account makes everything from tax time to accepting customer payments easier. As Australians increasingly move to using debit and credit cards for everyday purchases, this will only become more important. A business account is foundational for smoothly processing card and online payments and keeping track of your business’s finances.
You should be looking to set up a business account as soon as you’ve set your business in motion. You’ll need to set aside some time to gather the needed documents and information, but accounts that offer online registration will save you precious hours (and, in some cases, days). You’ll also need to give some thought to the impact any business banking fees will have on your budget. To save on fees, look for providers who are upfront about the costs of using their platform.
You have plenty of choices when it comes to choosing a business bank account. There are the traditional banks, of course, but their offerings don’t always align with the needs of modern business owners. High fees, excessive paperwork, and long application processes can sap your energy, turning what should be a basic task into a drawn-out process.
Zeller wants to change all that. Join our waitlist today to learn more.