Set up a business bank account
When starting a business you may consider setting up a business bank account to manage your business finances.
Do I need a business bank account?
If you're operating as a sole trader, you don't have to open a business bank account, but it's a great idea to do so.
If you're operating as a partnership, company or a trust, then you must have a separate bank account for tax purposes.
Can't remember if you're registered as a sole trader, partnership, company or trust? Search ABN Lookup to find your entity type. You can search using your personal name, business name or ABN.
Benefits of a business bank account
With a business account, you'll find it easier to:
- track and control your business expenses and income
- extract the information you need to give to your accountant or to do your tax return yourself when tax time comes around.
A business bank account also helps to present your business in a more professional manner when dealing with your customers.
One account for business and private use
If you use one account for both business and private purposes, you must clearly identify any personal payments or expenses in your cash book. See the ATO's page Setting up your business banking for more information.
The use of the internet to do banking is increasing to an extent that it is the preferred way to pay invoices. The convenience of internet banking allows you to make payments at any time.
Banks now take extensive security measures to protect your funds. You can see all your transactions, which makes it easy to account for your debits and credits. You may wish to set up direct debits and automatic payments for regular bills, which reduces the risk of errors.
There are also many great accounting software packages you can use to send invoices and track payments.
Find out more
- For more information on record keeping for tax purposes, read managing your small business records on the ATO website.
- Read our page on how to set up record keeping & accounting systems.
- Learn how to be PCI compliant when processing electronic card payments securely. You can also read about protecting your customers' information.