How To Open A Business Bank Account In Australia?
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You’ve worked hard on your new business idea, identified a need for your new product or service and are now ready to take things to the next level.
Entrepreneurs are the backbone of the country, and there are plenty of opportunities for new ideas and concepts to be launched!
But starting a new business requires a lot of work, and you’ll have to spend a lot of time on legal requirements and business documentation.
That’s why it can be tempting to keep things simple and use your personal bank account as you’re getting started.
However, it might not be the best option for you.
In this post, we’ll explain why you should open a business bank account and how you can apply for one.
Why Should You Open A Business Bank Account?
Starting a new business means spending a lot of time on admin tasks. Time you’d probably much rather spend on developing your website, sourcing suppliers or finding customers.
However, opening a business bank account can save you time and money down the road.
Here are three of the main reasons why you should open a business bank account as an entrepreneur:
It Makes Bookkeeping Easier
If you use your personal bank account to pay for business-related expenses and receive money, things might become challenging when tax time comes. That’s because as your business grows, so does the number of transactions, which can make it hard to manage the money that comes in and out.
Separating your personal account from your business account will make it easier for you to track your transactions and get a snapshot of your finances. And it will also prevent you from paying a hefty fee for your accountant to work out your personal transactions from your business-related ones.
It Helps Maximise Your Tax Deductions
As a small business, you can deduct some of your expenses from your tax at the end of the financial year. But to be able to do that, you need to identify your business-related expenses. If you use your personal bank account, not only will you waste precious time trying to identify items you can deduct from your tax, but you might also miss some.
It Looks More Professional
Asking your customers to transfer money to John Smith’s bank account doesn’t sound as professional as asking them to transfer money to ‘’ Oz Cleaning Supplies’’.
Using a professional bank account will help you appear more professional to your clients and suppliers and will also add legitimacy and credibility to your business.
How To Apply For A Business Bank Account In Australia?
You can open a business bank account whether you’re operating as a sole trader, a company, a trust or a partnership. You’ll need to provide an ABN or ACN, and your business needs to be registered in Australia.
Some of the documents you’ll need to provide as a sole trader include:
- An ABN
- A proof of ID
- Your business name
- Your business address
If you operate under another business structure, you’ll need to provide additional documentation. This may vary from bank to bank, so be sure to check out the requirements of the specific bank you're opening an account with.
There are a few options for you to open a bank account as a small business, so compare offers from different banks before applying.
Some of the highest rated business bank accounts in Australia include:
- Commonwealth Bank Business Transaction Account
- Westpac Business One Low Plan Account
- Wise Business Account
- NAB Business Everyday Account
- Suncorp Business Premium Account
- ANZ Business Advantage Account
- AMP Bank Cash Manager
- Great Southern Bank Everyday Business Account
Once you’ve chosen the best bank for you, jump onto the bank’s website, click on the bank account you’re interested in and follow the steps. Depending on the structure of your company, you might be able to open a business bank account online if you’re already banking with them, making it quick and easy for you to set up your business bank account.
If you’re ready to start your business, check our ten steps to starting a business in Australia guide. It was designed to help you navigate the tedious and sometimes daunting process of starting a new business in Australia.
Have You Thought About Business Insurance?
As a new business owner, don’t forget to get business insurance to protect your personal assets against any potential claim that could be made against your company. Unfortunately, not doing so could be fatal to your new business venture.
And to find the right policy cover to protect you and your company, hop onto our free instant quote generator, where you can get an estimate on market-leading insurance tailored to your needs in seconds. Simply enter your occupation and expected revenue to get started.