3 Bank Accounts Every Small Business Owner Should Have

3 Bank Accounts Every Small Business Owner Should Have
April 29, 2019 Biznostics

 

Do you ever struggle to have enough money to pay your tax bill when it’s due?

Would you like to have extra money to reinvest back into your business to help it to grow?

For this to happen, you need to manage your money wisely. One simple and effective technique is to set up three different bank accounts.  Each has a separate purpose and it allows you to effectively manage your money.

By setting these up and using them wisely, you will always have enough money to do the things that you want to do in your business. So let’s explore what they are…

1) Operating account

The first account you’ll need is your operating account. Your operating account is where you run the day to day operations of your business. It’s where you:

  • Receive your income
  • Pay your bill
  • Pay your wages etc

Basically, all your day to day cash inflows and outflows go through this account. Most businesses should have one of these accounts already.

2) Tax Account

The second account that you’ll need is your tax account.  Your tax account is where you start putting money aside for tax. Each week or each month, start to put money aside money which will cover your obligations such as:

  • Good and Services Tax (GST)
  • Pay As You Go Tax (PAYG)
  • Superannuation
  • Income tax; and so on

A big problem for many businesses is that they spend their tax money because it is in their bank account.  By separating it from your operating account you will be less likely to spend it.  You’ll start to manage your business based on what is left in the account.

3) Profit Account

Finally, the third account you’ll need is a profit account. This is where you put money aside for the profits of your business. So as your business makes profit, simply put some of that money aside. Again, if you leave it in your operating account, you’ll spend it. But if you put it aside in your profit account, you’ll then be able to choose what you spend your profits on.  This could be things like:

  • Pay out dividends
  • Buy new assets for your business
  • Reinvest in the growth of your business

The beauty of starting to manage your money this way you’ll be able to start to choose where you spend your profits, rather than it just getting absorbed in the day to day operations.

So just to recap, to manage your money wisely in business, set up three accounts:

  • Operating account
  • Tax account
  • Profit account.

 

Set these up today and by putting the money aside in each of these, you’ll find that you’ll have the money that you’ll need to run your business successfully.

 

 

P.S. Whenever you are ready here are 4 ways we can help you build and grow your business:

1) Download your copy of 3 Proven Tactics That Give You 5 Hours Back in Your Week

This totally free guide includes tips, time-savers, and expert advice on how to immediately claim back 5 hours of your time each week. Inside you’ll discover 3 proven tactics to stop time being wasted in your day so you get more done each week. To access the guide click here

2) Watch the Business Freedom Formula Video

In the video you’ll to discover the step by step blueprint we use to help small businesses create their version of business freedom. This could be simply streamlining your business so it runs more efficiently, increasing your profits so you have more choices or setting your business up so you can have time off without worrying that it is all going to fall apart. Click here now to watch

3) Book a 10 Minute Exploration Call

If you would like to explore how Biznostics can help you run and build your business, then book your 10 minute exploration call. On the call we’ll find out a little bit about your business and work out if and how we can help you.  Book your call here

4) Join our Business Freedom Program

The Business Freedom Program is designed for business owners who feel stuck in the day to day running of their business and their business is not running as efficiently as they like. It helps you make your business much more profitable, much more efficient and much more enjoyable to work at.  We are putting a new group together next month so if you would like to build a strong and successful business email us here with ‘Business Freedom’ in the subject line.