Joint Business Account

[chensta]

Hi everyone here, me and my partner is looking to setup a bank account solely for our business. This account will be our working fund, if we need to use money for anything, we will have access to it. Now my question is, do you guys have any tips in setting up such an account? Also do you recommend certain banks? with certain features etc.

Thanks in advance.

William

[BeYourOwnBookkeeper]

I have been running my own bookkeeping business for the last 4 years and the first thing I did was set up a business bank account. It makes it so much easier to track business income & expenses if they all go via one account.

At the time I was banking with a credit union so I just approached them to set up another account in the name of my business. I also set up a second high interest account to transfer money into to provide for GST and Income Tax.

It is useful to have a cheque book, but I mainly use my visa debit card and internet banking. I haven't had the need to set up merchant facilities as most of my clients pay direct to my account via EFT rather than via credit card.

I don't pay any fees on this account unless I use another bank's ATM machine.

Recently I have developed a manual for Solo Business owners with ideas to simplify their administration and bookkeeping requirements. It is available on line at http://www.BeYourOwnBookkeeper.com

Robyn Howard
author of Be Your Own Bookkeeper

[Rhys]

William,

Hi & welcome to FS.

I agree with Robyn's comment that you should set up a separate bank account for your business - it will make your bookkeeping much easier, so will save you time and money on your tax return, and the bank fees should only be a few dollars a month.

Once you have a business bank account and depending what you have in mind for your bookkeeping solution there are options such as Xero that will allow you to set up your bank account so that all your transactions automatically import into your books daily - again saving you heaps of time and money.

You don't say if you are running your business with a registered business name, but if so you will need to set up the bank account in the name of the business rather than as a joint account in the name of you & your partner.

Good luck with the new venture,

Cheers, Rhys

[MattR]

Also look at joint signatories and joint ineternet approval for payments to protect yourself and your partner from fruadualent behaviour.

[Rhys]

Hey Matt, not sure I agree with this. The only protection this offers is from each other!

Joint signatories / join internet approval makes sense in many circumstances, but I doubt that it does here (not sure from the context if William is referring to a personal or business partner). Joint approval would prevent either of them from taking funds from the account without the other's approval but the downside is that they would then both have to authorise every payment which is often very inconvenient. I have worked in partnerships a couple of times where we have specifically opted not to use joint authorisations because of this.

Imperative that they each have logons and passwords which are sufficiently robust (which the banks to some extent enforce through compelling a combination of upper and lower case, letters and numbers, etc) to protect the account from others, but that doesn't require joint approvals.

cheers, Rhys

[Emroy]

DEFINTAELY Get a separate bank account. It's a nightmare to seperate whats "personal" and whats "business".

I currently have 3 accounts with Commonwealth bank - pay $10 a month in fees for all of them and they work a charm.

One is a Business Account, one is a personal and the other is savings (Where I store GST, Tax etc until the government wants it)

I can transfer between all instantaneously - So very handy.