20th June, 2022
One of the first things to do as a new business owner is set up dedicated bank accounts. Here’s what to expect as you do.
Starting a business is undeniably exciting but setting up finances for your new venture can be daunting – especially when it comes to opening a bank account.
If you’re looking to get up to speed on business, here’s the lowdown on how to open a business bank account in Australia
Unsurprisingly, it’s all in the name: a business bank account is a bank account you use for business purposes. It works like a personal account in many ways, but business bank accounts provide handy features designed to simplify your business finances.
Before opening a business bank account, you must prepare a few key documents and details for your application.
Each director and anyone operating the bank account must provide valid government-issued ID, such as a passport or driver’s licence.
A personal bank statement or utility bill are ideal.
This should be exactly as you registered it through Australia Securities and Investments Commission (ASIC).
This must be the address where your business is registered.
Have your Australian Business Number (ABN), Australian Company Number (ACN), and your business’s tax file number (TFN) handy.
This includes the industry your business occupies and supporting documentation related to trust or partnership business structures.
Opening a business account isn’t unlike opening a personal account.
Depending on the kind of account you’re interested in, you’ll typically:
Shopping around is vital if you’re opening a business bank account. To ensure the needs of your business are accommodated from the get-go, consider things like:
After finding a winner, apply on the bank’s website with the details and documents mentioned above. Depending on the account, you may have to apply or follow up with supplementary documents in-branch.
If you’re approved, you’ll be able to use your new business bank account as soon as it’s opened. Any credit or debit cards included with your business bank account will be posted shortly afterwards.
Having your finances in one place may seem simple on paper, but there are three reasons why opening a business bank account is a much better idea.
Separating personal transactions from business transactions can speed up financial admin year-round for both you and your accountant. And in the event of an audit, you’ll have right numbers for the ATO on hand.
Business expenses mingling with persona grocery purchases can make it difficult to easily track things like cashflow, leading to potentially disastrous financial problems going unchecked.
With no one-size-fits-all approach to business banking, treat any time spent researching as an investment.
Depending on the needs of your business, you might consider a:
You may even need more than one account to cover all your financial bases.
Just keep in mind that similar-looking business bank accounts can differ in big ways between banks, so make sure to always read the small print.
Applying for a business bank account online is often as simple as opening a personal account. Just fill in the online application and you’re good to go.
Not all business bank accounts can be opened online, though. Some banks allow you to start your application for certain accounts online but require you to drop into the branch for an ID check to complete your application.
If you eventually find a business bank account from another bank that better suits your needs, changing banks often involves three steps.
Inform your service providers and customers about your new account details to ensure your cashflow isn’t impacted by the change.
Carefully go through your statements to ensure regular payments like staff wages and direct debits are migrated over to your new account.
Once you’ve finished setting up your finances, contact your previous bank and close your old business account.
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Business bank accounts can have a variety of fees and charges. Depending on the account, these can include:
Being savvy can help you save money. When hunting for an attractive business banking account, remember to:
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