Why you should open a separate business bank account

Difference between a business account and a personal account

What is a business bank account?

Business bank accounts allow you to easily manage your business expenses and income. Personal bank accounts help individuals access and manage their personal funds. If you're a small business or a sole trader starting out, it's a good idea to open a business bank account, even if you run your business part time.

Can I have one bank account for multiple businesses?

Yes, you can use one business bank account for multiple businesses if they operate under the same ABN or legal entity. However, if you have separate accounts for each business, it can help ensure financial tracking and reporting is easier to deal with – especially accounting and bookkeeping.

How many business bank accounts should I have?

The number of business bank accounts you should have depends on your financial needs. Many businesses benefit from at least two accounts. This includes one for daily transactions and one for savings or tax purposes. Additional accounts may help you manage different revenue streams or expenses more effectively.

Benefits of a business bank account

Many small business owners use their existing personal bank accounts, but there are benefits to opening a separate and dedicated account to manage your business finances.

Let’s explore the main benefits of opening a separate business bank account.

Make tax preparation easier

• When tax time comes, it'll be easier to get your books in order if you have a separate account for your business. You won’t have to spend hours trying to work out which transactions were for your business.
• If you use a bookkeeper or accountant to do your tax, you won’t have to pay them to sort out what’s business and what’s personal.
• A separate business account can make it a lot easier to identify and deduct any bank fees from your tax liability. Make the most of small business tax benefits to help improve your tax position.

Link to other business accounts and accounting software

• If you have a business bank account you can link other accounts like a business credit card or a merchant payment device, making managing all your transactions smoother and less time-consuming.
• Once your business starts using accounting software, having a separate business account will make bookkeeping a lot easier. That’s because many accounting packages can integrate directly with your bank account, to automate a lot of the bookwork. You could connect software like Xero, MYOB or Quicken to a NAB Everyday Business Account, which has no monthly fees.
• You can manage business finances easily with our simple, smart and powerful bookkeeping solution. Find out more about NAB Bookkeeper.

Track your business expenses and income easily

• With a separate business account you’ll find it much easier and simpler to track your expenses, income and profit. You’ll be able to quickly look at the numbers and then make decisions about where to invest your time and money, and where to reduce expenses.
• If you run your business through a personal bank account, you’ll have to find a way to work out all these things, and that can be difficult and time-consuming. This manual process is also prone to error and there’s a risk of making business decisions based on inaccurate information.

Prepares your business for the future

• It's much easier to have a separate bank account set up from the start, so you won’t have the hassle of changing it later on. If you start with a personal account then swap to a business account, you'll have to tell your suppliers and customer to change the banking details they have on file for you. Also, with a business account you’ll be better prepared to get your books in order. This'll make it easier if you decide to apply for a loan or obtain finance to expand. It'll also make it much easier for your business to be valued, should you consider selling it.

Cash flow management

• Good cash flow management will make sure you always have money available for paying your expenses when they're due.
• Some business accounts offer tools to help manage cash flow, such as invoicing and payment solutions. Our cash flow forecast template helps you to track your month-by-month income and outgoings, giving you the insights you need.

Cash flow forecast template (Monthly) (XLS, 60KB), opens in new window