If you run a small business or have just launched your start-up as a sole trader in Australia, you will probably need a business bank account (and a debit card) to manage your finances.

A business bank account is a different and separate account from your personal one, where you can deposit your income, pay your expenses and taxes, and keep track of your cash flow. It’s handy at tax time and if you have to do your Business Activity Statements as it won’t be diluted with your personal accounts.

Whilst some businesses suffered through COVID, a report by Xero, an online accounting platform, found there was a 33% increase in new business registrations in Australia in 2020 compared to the same period in 2019.

Benefits of business bank accounts

You might be wondering whether you need a separate bank account for your business transactions. Well, the answer is yes, for many reasons. Here’s some of the advantages of having a separate account for your business:

• – Easier tax reporting: Having a separate account for your business makes it easier to keep track of your income and expenses, and to prepare your tax returns. You can also claim deductions for any bank fees or charges related to your business account.
• – Better cash flow management: A separate helps you manage your cash flow more effectively. You can see how much money is coming in and going out of your business, and plan accordingly. You can also set aside money for taxes, wages, bills and other expenses.
• – More professional image: A separate bank account for your business gives you a more professional image in the eyes of your customers, suppliers and lenders. You can use your business name on your cheques, invoices and statements, and avoid mixing your personal and business finances.
• – Access to more services: A separate account for your business may give you access to more services and products that suit your business needs, such as overdrafts, loans, merchant services, online banking and more. You may also get better interest rates and lower fees than a personal account.
• – Accounting software integration: Software such as MYOB and Xero have built in data connections to many major banks in Australia. This can help streamline your reporting and reduce operational overheads.

Benefits of adding a business debit card

Now you’ve got your business bank account to be paid into, you can add a debit card onto the account to start spending that cash. A business debit card can offer you many advantages, such as:

• – Convenience: You can use your business debit card to pay for goods and services online or in person, without having to carry cash or cheques. You can also withdraw cash from ATMs or EFTPOS terminals when you need it.
• – Security: If your card is lost or stolen, you can report it and get it cancelled immediately. You may also be covered by the zero liability policy of your card issuer, which means you won’t be held responsible for unauthorised transactions made with your card.
• – Control over spending: Your business debit card allows you to track your expenses and manage your cash flow more easily. You can view your transactions online or on your monthly statement, and set spending limits or alerts for your card.
• – Shared spending: With a business debit card you’re able to add other business partners or staff on to the account, so you don’t have to worry about being present every time you have a business expense to approve. You can also allocate different cards to different employees or departments, and monitor their spending accordingly.

How to choose a business bank account and debit card

Choosing a business bank account and debit card is an important decision for any business owner. You want to find the best option for your needs, such as fees, features, rewards, and customer service. Here’s some tips that might make it easier for you.

• – Compare fees and charges. You’ll find that different banks will charge different fees for opening and maintaining a business bank account, such as monthly account fees, transaction fees, overdraft fees, ATM fees, and foreign currency fees. You’ll want to find a bank that offers low or no fees (even better) for the services you use most often.
• – Compare features and benefits. It’s no secret that different banks will offer different features and benefits for their business bank accounts and debit cards. You’ll probably need online and mobile banking, but will you need a cheque book or deposit books? You’ll want to find a bank that offers the features and benefits that suit your business needs and preferences.
• – Compare rewards and incentives. Keep an eye out for rewards and incentives for business accounts and cards, such as cashback, points, discounts, vouchers, or freebies. If you want a bank that offers rewards and incentives just be careful there’s not extra fees for those features.
• – Compare customer service and support. Different banks may offer different levels of customer service and support for their business bank accounts. You’ll want to make sure you get things like as on-shore phone support, email support, chat support, branch support, or dedicated relationship managers. You want a bank that offers reliable and responsive customer service and support.

Just remember to shop around and negotiate. Don’t just settle for the first option you find. Compare a range of different banks and what they are offering you. You may be able to negotiate better terms or deals with some banks if you have a good credit history, a large deposit, or a long-term relationship with them. You can also ask for referrals from other business owners or professionals who have experience with different banks.

Open your business account today

Business accounts and debit cards are essential tools for managing your day-to-day finances and transactions as a business owner. They offer you benefits like lower fees, higher limits, tax software integration and optional rewards programs.

Depending on your business size and structure, choose from different types of accounts and cards that suit your budget and goals.

If you’re a sole trader in your home-office, an online partnership, or a 1000+ employee company, there is a business account or card that should be able help you grow your business and achieve your objectives.