How to set up business banking
Looking for a bank account for your business? Managing your money and cash flow is core to your business success – and choosing the right business bank account and business services will contribute to this.
One of the first things you may want to set up is a business bank account1, which for ease of accounting and reporting is separate from any personal accounts. It will record your income and outgoings, making it an important source of information at tax and BAS (Business Activity Statement) time.
This 'business transaction account' should be simple and reliable, and easily linked to and from any other business accounts you hold. Armed with an Australian Business Number (ABN) if you are a sole trader or Australian Company Number (ACN) if you are a company, you can generally apply for a business bank account online in minutes. Read more about these company structures in our Choosing a business structure article.
When setting up your business bank account(s) you'll need to decide how many extra signatories you'll need (if any) and who needs access, such as your accountant or payroll employee.
You may also wish to consider extra security, such as a second-factor authentication token. These keyring-sized devices give authorised signatories access to specific account functions, including payments above any pre-determined daily limits.
Online banking gives you the flexibility to check balances, transfer funds and reconcile payments on the go 24/7. If you choose Westpac Online Banking1 you can register online as a sole trader or partnership, or in a branch if you're a company.
Business credit cards1 could be a useful way to manage and reconcile business purchases, and any interest free periods offered may help with your cash flow. Additionally, business expenses paid using some credit cards can earn rewards points, which can be spent on things such as gift vouchers, travel and merchandise.
Fees and charges may apply, so it's best to compare the options available and choose the business credit card that matches your needs.
Business banking offers a number of payment solutions for businesses, but the smart way to get paid faster is to give your customers the simplest possible way to pay. This could be through bank transfers or other types of online payment, or EFTPOS1 if you're operating a shop, café or restaurant.
Things to consider include any applicable fees, plus the process for moving payments into your business transaction account – always remembering that the sooner you have access to customer payments, the healthier your cash flow will be.
Even if it's just for short periods, it may be worth moving money into a savings account1 to gain extra interest, when compared to non-interest earning transaction accounts. This could also be a good way to set aside funds required for future payments, such as your quarterly BAS submissions.
Some savings accounts are free to set up and maintain, so you could open a number to keep your funds segregated for different purposes. Moving funds between accounts is quick and simple through online banking.
If you want the certainty of a fixed rate (rather than a variable savings account rate) and are happy to lock your money away for a specific period, a term deposit may be the way to go. If you already have a Westpac transaction account, a business term deposit1 can be set up through online banking, without the need to visit a branch.
With so many options to consider, it’s useful to have access to people who know your business and track record. Therefore, it pays to establish and maintain a good working relationship with your business bank, to help support your business.
1. Westpac’s products are subject to terms, conditions, fees and charges; and certain criteria may apply. Before making a decision, read the disclosure documents for your selected product or service, including the Product Disclosure Statement and T&Cs for Westpac business bank accounts, business credit cards, merchant services, business savings accounts and online banking, by clicking the above links; and consider if the product is right for you.
The information in this article is general in nature and does not take your objectives, financial situation or needs into account. Consider its appropriateness to these factors; and we recommend you seek independent professional advice about your specific circumstances before making any decisions.