Manage episode 373090096 series 3351301
In this episode, we will be discussing a topic that is often overlooked but crucial for the success of your business: bank accounts. Many business owners make the mistake of not having the right bank accounts in place, which can lead to confusion, mistakes and missed opportunities.
So, let's dive into the world of bank accounts and explore what you need to know to set up the essentials.
The first and most important rule when it comes to bank accounts for your business is to have a separate business bank account. Mixing personal and business transactions in the same account can lead to a host of problems, including difficulties in tracking income and expenses, potential legal issues and a lack of clarity in your financial records.
Even if you are a sole trader and not legally required to have a separate business bank account, I highly recommend you do so. By keeping your personal and business finances separate, you can streamline your bookkeeping process, avoid confusion and ensure that you have a clear picture of your business's financial health.
While you can get away with having just one or two main business bank accounts, there are a bunch of other types that can really benefit your business. I take you through the six different options that will ensure you have funds set aside for each of your obligations, such as:
- Savings Account
- GST Account
- Tax account
- Expenses Account
- Wages Account
- Profit Account
I share some ideas around what type of funds you can put into each account and why, as well as which areas of your business they will benefit.
While having multiple accounts can provide clarity and organisation, it can add a tiny bit of extra admin - that’s why it's important not to overwhelm yourself with unnecessary complexity. I encourage you to evaluate your specific needs and goals, and determine which accounts are essential for your business.
Remember, just like with everything in business, there’s no one-size-fits-all. As long as you’re complying with your obligations, the way you structure your processes is your decision.
So go find out what works for you, and run with it!
Resources mentioned: FREE New Business Checklist
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