So, if you have a larger wage bill or your business finances have a larger number of moving components, then a business bank account may be a solution for you.Įven if you have a small business that shares your name or goes by the “Smith & Sons” style moniker, many customers will expect those they trade with to have a dedicated billing account and will recognize a bill being paid to a personal account. These are features you simply will not have if using a personal account. So not only will you be able to monitor profit in different areas and see which expenses you need to cut down on, but you’ll also be provided with invoicing tools and accounting software. Another extremely useful function gives you the opportunity to sub-divide your account to put money aside where it’s needed, for instance, to have a certain income stream allocated to paying your wage bill. With a business bank account, the data and resources your bank provides you with will be even better. These days, most banks provide their customers with detailed statistics on where they’re making money and breakdowns of their expenses. When you come to do your self-assessment, it will be easier to recognize any tax deductibles or allowable expenses that could reduce your tax bill. Once again, the question you need to ask is whether or not you’ll find it difficult to recognize the business transactions you’ve been making, especially when completing your self-assessment as a sole trader.įor managing your business finance and easing those tax headaches, an Epos Now system with app integrations to link your POS to accounting programs like Sage or Quickbooks is an excellent way to stay on top of your bookkeeping. ![]() Regardless of whether or not your business is profitable enough to benefit from going limited, accurate bookkeeping is far easier when using a business banking account. On the other hand, if yours is not the kind of business that makes a large number of transactions, or if the transactions your business makes are regular and of a similar amount, separating the personal and professional shouldn’t be too difficult. This could lead to you failing to notice client bills that haven’t been paid or duplicate payments to suppliers. If you are a sole proprietorship, then it is your choice whether or not to get a business bank account, so here are some points to consider:Įven if you don’t need it, should you get a business bank account if you’re self-employed? Well, if your business processes a large number of transactions (for example, a retail business), then having your personal transactions mixed in with your trading will make managing your finances much more difficult. However, sole proprietorships generally pay a larger rate of tax than limited companies. Limited companies have certain responsibilities that sole traders do not have, and company information will be registered on the directory of Canadian companies' website. If this is the case, then legally you must have a business bank account which needs to be entirely separate from your personal account. This is because the law views sole traders and freelancers as private individuals that are accountable for all business risks and expenses.īut, if you have a larger business, you may be registered as a limited company. Anyone that owns their own business as a sole proprietorship is self-employed, regardless of whether they have employed others or not, and is allowed to run their business through their own, personal bank account. Legally, sole traders do not need to have a business bank account. To help make this a little easier for you, we’ve compiled some of the key things to consider when thinking about this important question.ĭo you need a business bank account? What does the law say? Whatever your situation, many business owners have different opinions on whether you need a business bank account, or if you’ll be okay using the same bank account for business and personal finances. ![]() Or, maybe you’ve been using your personal bank account to run your business for some time and wonder if it’s time to take the next step. ![]() Perhaps you’ve recently started your business, or have seen your business growing in recent times.
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