Why opening a business bank account is a great idea
If you’re a freelancer or a small business owner, opening a business bank account is a fantastic idea. In this article, we take a look at why.
When you work an ordinary 9-5 job and have a conventional employer, it’s SO easy to keep track of your personal finances. You might grumble that you’re not being paid enough, but at least you know where all your money is.
But let’s say you quit your regular job because you want more financial freedom. You also want more money. So you become a freelancer, or you start your own business. Awesome!
The money starts coming in and you’re doing well. But then your personal finances start to overlap with your business ones. You can’t keep track of your incoming and your outgoings anymore. Worse still, the mean old tax man wants to know how much you paid last year but you just don’t know! The numbers are driving you crazy!
Separating your personal finances from your business ones is really important at this stage of your career. As well as keeping stress at bay, let’s take a look at other reasons why opening a business bank account is a very good idea.
A Business Bank Account Will Look After Your Personal Assets
Opening your own small business will naturally sound really exciting. But things can go wrong. Small businesses fold, and when they do, your personal assets could take a hit. For this reason, you’ve probably formed a limited liability company, as it protects your personal assets from debts that your business can’t pay.
However, you can only maintain your personal liability protection if you maintain your limited liability company properly. You can do this by separating your personal finances from your business ones, in the form of a business bank account. This ensures that your business really is an entity of its own.
Your Taxes Won’t Drive You Insane
Easily one of the worst things about being self-employed is that you have to sort your tax affairs out yourself. Unlike conventional workers, you have to do your own accounts.
If you don’t separate your two accounts, you’re going to cause yourself a major headache once the tax man comes-a-knockin.
There will be business expenses you’ll want, and need to write off. But because these expenses are lost in the mire of your personal finances, it’s going to take a looooooooong time to find ‘em. If you decide it’s easier to just not bother looking for them, you’ll end up paying more tax than you really needed to.
A Business Account Makes You Look More Professional
So, you’ve got your own small business. You’re an entrepreneur now! Look at you! So why are you still paying contracts with your personal checks? Why are clients writing checks out to your personal account?
That doesn’t look very professional, and you could lose your credibility. Now that you’re in business, you need to start sending out the right messages to clients and contractors. When you have a business account, you can sign checks from that account, which makes you look so much more specialised.
These are a few reasons why opening a business account is a great idea. It’s a really easy process, too! Stop delaying it, arrange a meeting with your bank, and take your business to the next level.
Another important thing to do is booking in to see an accountant you can trust. The team at IQ Accountants are the go-to Gold Coast accountants, with good reason. Our highly-skilled team can help with preparing a business plan, cash flow planning and projection, budget development and so much more. Call us today on 5576 0011 and let’s talk business.
