4.6

• An essential part of establishing a business in

  Australia is opening a business bank account
• While most business owners may already

  have an individual bank account for their

  personal use, it is highly recommended that

  the transactions of the business be performed

  through a separate bank account
• The ‘separate entity’ accounting principle states that we

  should always record the transactions of the business and its

  owners separately.
• It is easier to monitor the financial performance and position

  of the business if it has a separate account to that of its

  owner.
• It is easier to calculate business expenses, such as bank fees,

  and revenue, such as interest earned, which makes it less

  time consuming and costly to prepare tax returns for the

  business.
• choosing the right bank account

  from the right financial institution requires

  consideration of the following factors: Bank fees. Interest rates and Overdraft facility.
• A business owner should keep the finances

  of the business separate from their personal

  finances.
• A business should carefully consider which

  banking services offered by different

  financial institutions to use.