Many entrepreneurs do not distinguish between their private and business expenses. The reason is that they first want to save the account fees for the business account and postpone the subject until later. But unfortunately, this is too short-term! Because you can lose the overview very quickly.
A practical Example:
At home your TV breaks down (600,- Euro),
and this directly after the holiday (1.000,- Euro).
Then comes the tax payment (2.800,- Euro),
and the phone system goes on strike (350,- Euro)
Private expenses are often not calculable. However, your „account for everything“ contains private expenses in addition to business expenses. Suddenly you are faced with a mountain of costs! The result is a mess that robs you of a lot of energy.
There are three reasons why a proper business account should be opened from the very beginning:
Gain an Overview
With a business account you have a clear view of your business and private income and expenses at all times. This allows you to better estimate what you can afford – both privately (such as a new television) and professionally (such as a new computer). Even if customers don’t pay your bill, you will notice this more quickly.
Build up Reserves
Our tip: Transfer a fixed „salary“ from your business account to your private account every month. The salary must of course cover your private expenses. This way, you won’t automatically spend money if your business runs well for several months at a time. You automatically build up reserves. You can withdraw these reserves at the end of the year as profit from your business.
If you make a clear distinction between business and private money, your tax consultant and sometimes the tax office will be pleased. If your tax consultant has a question, you don’t have to search and compare between countless small private bookings. Your receipts are always clearly assigned to an account transaction. This saves you a lot of trouble.
How to find the right Corporate Account for your Business?
Every founder and self-employed person is naturally looking for the best account for his or her business start-up. Some banks are well-known addresses, other banks are rather unknown. That is why we present the different providers here. For all conditions the status 07/2017 applies.
Revolut is a popular neobank, likely one of the most well-known at the moment. They are around since couple of years, offering modern online bank accounts for both private and business users. The business account serves exactly all the needs discussed at the beginning of this article.
The app is super easy and user friendly, you have an overview of your current financial status at any time and handling your income and expenses is simple and smooth. With Revolut Business customers get european IBAN accounts for fast and cheap money transfers within the SEPA area.
But Revolut can handle money transfers to countries all over the world.. So the Business account is suitable especially for modern online entrepreneurs and companies with international business activities. GoodByeBanks has tested the business account.
The N26 is a direct bank and therefore inexpensive. It advertises especially with its bank app. The N26 Bank received its license in 2016 and is thus another very young provider. The N26 Business Account is currently free of charge. However, you can currently only withdraw money for free a few times a month. Unlimited cash withdrawals are available in the Cash26 pool and from thousands of retail partners. If you regularly withdraw cash, for example, the business current account is less suitable for you.
Holvi Pro Account
Holvi is another modern supplier on the market. Holvi is aimed at freelancers and the self-employed. It combines the company account with automated accounting. The bookings are automatically assigned to the appropriate accounting categories.
Invoices can also be created more easily. This means less work for the accounting department and it is easier to forward the data to the tax consultant – that’s the promise.
A Holvi Pro account currently costs 9 euros a month in account management fees, and without additional functions it is currently even free. Anyone interested in exciting new approaches to banking can certainly opt for a business account from Holvi. Holvi also offers a credit card.
Check this Holvi Business review for more details.
Our tip: Pay attention to the basic fee when choosing a business account. As you can see in the overview: Only very few banks offer a free business account. Nevertheless, the costs vary greatly.
Another important item is the cost per booking. A paperless booking is for example an online bank transfer. A posting with voucher is a posting that you submit at the counter of a branch bank. A voucher-based posting involves more work for the bank, which results in higher costs.
If you have a large number of postings, it makes sense to have a business current account, where the postings are free or inexpensive. In this case, you pay a higher monthly fee, but do not have to pay extra for each individual posting.
For those who have few bookings, a business account with a low monthly fee makes sense. You pay for the individual bookings. But if you have little „run“ on your account, you can surely get over it.
In addition, the question often arises as to whether it is also possible to use a private, in the best case free current account for business use. From a purely legal point of view, the bank’s terms and conditions of business are relevant in individual cases, but as a rule it is not permitted. Particularly in the case of a GmbH, a business account is actually obligatory.
In practice, business use is possible until the bank complains. This is usually the case if an employee checks your account due to many accounting transactions. It becomes annoying when you have no possibility to convert your existing private account into a business company account and have to change the bank. Then the question often arises in retrospect whether the costs saved in terms of lost time and nerves due to the move are really worth it.
Applying for a Business Account online
In general, it can be said that opening a business account has become much easier. Most of the steps for opening an account can be done directly on your PC or with your smartphone. The only sticking point: you have to identify yourself. So that the bank can be sure that it really is you personally. There are essentially two ways to identify yourself.
The „Online Identification Program“
Many banks now offer an online identification program. At some banks this is called differently. But it boils down to the same thing. The identification is usually done via video transmission. So you need a camera – either on your PC or via your smartphone. An employee sits on the other side of the screen. The employee then takes photos of you and your ID card. You will be asked for permission for such photos in advance. This online identification usually only takes a few minutes. So it is very convenient. You can also take the opening right to the end.
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