First of all, is to affirm that it to you for business start-up is not required by law and the continuation of a company to open a business account and to lead. However, a clean and clear separation of private and business financial transactions makes a lot of sense for you. For this reason alone, to make the work of your tax advisor and the tax office easier, it is better to book business and private payments strictly separately from each other. If your company is run as a corporation , however, opening a company account is mandatory for you.
What is a business account?
A business account is a current account that helps companies, self-employed and freelancers to strictly separate private and business expenses. As an entrepreneur , you are obliged to maintain a business account . If you work as a freelancer or self- employed, you can freely choose whether you want to have a current account or a business account.
What is the difference between a business account and a current account?
- Can be in the name of the company
- Also possible with special banks for business
- For company bookings only
- Easy to recognize bookings for the tax office
- Many additional functions such as direct debit
- Account management costs are usually higher
- No overdraft facility available. Current account credit must be negotiated with the bank
- Must be in the account holder’s name
- Only possible with conventional banks
- It is difficult to distinguish between private and professional bookings
- Increased effort necessary to separate bookings
- Normal standard functions only
- Frequently better conditions for account management
- If the creditworthiness is appropriate, a disposition credit is available
What to consider with a business account
You can open the business account at any credit institution or bank . It is possible to have a business and private account with the same institute. As a rule, banks offer you different conditions for the company account than for the private account. If you are a self-employed small business owner and, accordingly, the small business regulationare subject to, you also have the option of using a normal current account as a company account. All expenses relating to your company are made through this account. The customers transfer the due invoice amounts to this account. First and foremost, it is important that you, as an entrepreneur, check what services you expect from your bank and what needs you have with regard to the company account.
Of course, most banks are very interested in being able to count self-employed people among their customer groups and therefore lure you with attractive offers. But it is worth comparing and taking a look behind the scenes, because attractive additional services are often associated with unattractive additional costs . There are other reasons for choosing a business account:
Should a company account be or have to be opened at a later point in time, this is associated with greater effort and higher additional costs. So you have to change all business correspondence. Your customers need to be informed about the account change and that doesn’t always go smoothly. This in turn leads to increased workload , payments and incoming payments have to be rebooked and the correct rebooking checked.
When does a business account become compulsory?
For you as a freelancer and self-employed person, there is no legal obligation to keep a business account in Germany . However, it is mandatory if your company is a corporation , for example a GmbH . Here you have to have a business account.
Why open a business account?
You only need to open a business account if there is an obligation as described above. Otherwise, the basic functions such as the speed of transfers or credits are the same between a private checking account and a business account. The question arises, why a business account? An overview of the reasons that speak for the business account.
Benefits of a business account
- Separate bookings neatly : As a young founder or start-up company, it can be difficult for you to separate everything precisely at the beginning.
- Avoid later effort : If you switch from your current account to a business account later, this means additional effort for you. You also usually incur additional costs. And for your customers, changing accounts at a later date is also associated with effort.
- Easy to set up: With some banks or savings banks, you have the option of setting up a sub-account for your existing private current account free of charge. You can use this as a business account.
Which account type for whom – the different account types
Self-employed commercial agents, for example, are often on the move due to their professional activities and therefore it is advisable to consider opening a current account with an online or direct bank. This is an advantage because a commercial agent often does not need a consultant on site and most institutes even offer a free credit card in this case. Depending on the offer, the account itself is even free of charge.
An aspiring young entrepreneur is often overwhelmed by the things that flow into him that the establishment of a business entails, so it is advisable to keep a pure business account. In this way, private and business income and expenses can be clearly separated from each other.
Business account for small business owners
For small businesses, the maintenance of a business account is not mandatory by law. Still, there are some advantages and reasons for you to think about it.
- Right from the start, a clear distinction between private and professional sales
- Banks offer special business accounts for small businesses like you, some of which are free. This is often the case with online banks in particular
- With a business account you can use several additional functions and work with accounting software
Use accounting software for small business owners and keep your bookkeeping and invoices under control.
GbR business account
The GbR , society under civil law, applies to other forms of company, the most uncomplicated when business partners get together. In this case it is possible that all expenses are made proportionally from the respective accounts of the individual shareholders. But this brings with it some problems that you can avoid with a joint business account.
- All shareholders have access to the account. This ensures clear transparency between you and your partners and, of course, fairness.
- You can incorporate a security function by turning this business account into a so-called “And account”. This means that the consent of all shareholders is required to access the account.
- Each partner receives their own card for this business account. This makes an exact billing possible at any time.