7 Tips for being more financially in control of your money
July 2022 Newsletter.
Don’t get caught out.
Do you have separate business bank accounts?
As a business owner there are many expenses that can crop up and ones that you don’t want to be late paying or stuck not being able to pay things like taxes. That is why we recommend you having a separate bank account for these items.
We see a lot of businesses that come to us in the initial stage without a separate bank account. If all your money are in one account then you are more likely to spend it if a business or personal emergency happens as often people believe they will be able to pay it back later. This is not always the case.
Time and time again we see people get caught out by not having money aside for their mandatory business obligations, such as taxes.
Some questions to ask yourself before setting up a separate business account are:
Am I registered for GST?
Am I operating as a sole trader or company?
Do I have to pay payroll tax?
What is the estimate of my income tax likely to be?
Depending on the answer to these questions you will need to put at least 35% of your business income aside for GST and income tax. The amount of your payroll tax will depend on how many employees you have.
A separate business account can also make it easier to identify and deduct bank fees from your tax liability.
Ideally you will have 1 bank account for all your business income and 1 bank account for your taxes. Depending on the size of your business you may even need 2 or 3 extra business accounts.
It’s also easier to understand your exact financial position when you have separate business accounts. This allows you to ensure your bookkeeping is more accurate and up to date.
How can Square Penny help?
If you need help in understanding the importance for separate bank accounts, how they should be structured or how many business bank accounts your business needs, reach out to the team at Square Penny.
We work as if we’re your in-house financial team – we take care of transactions, processes and analysis, without needing to take up another desk in your office.
To find out how else Square Penny can help, click on the video link below.