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First and foremost, if you are a corporation or a limited liability company, a separate bank account is required by law (see business.gov.au for more detail). For everyone else, it is simply good business practice. Why?

Clear and separate business records make it much easier to see whether your business is making a profit or draining your personal bank account. It also makes tax time, and, heaven forbid, any ATO audits, a lot easier to complete by clearly distinguishing between business and personal.

You may not be the only one to see your business account
Much as your bookkeeper, accountant, and even the internal team member who occasionally has to log in to make a payment online knows your business intimately, they probably don’t need to know about your underwear splurge or the engagement ring you haven’t proposed with yet! Nor, for that matter, does the ATO.

A business bank account may cost a small monthly fee to establish and manage, but the investment is worth it over time. Once you have set up your business account, make it work for you. Create a sub-account to put aside money for tax time, connect it to your electronic accounting software for easier acquitting of accounts, or simply enjoy the speed with which you can tell how much money you have at the end of the month. Knowledge is power, and knowing these numbers is the bookkeeper’s secret to your business success.

For more great advice like this, schedule a meeting with me at https://calendly.com/lucy-pedley-bookkeeping