You're probably thinking that you might as well use your own checking account to receive your business payments, right? That it's a waste of money to pay extra for another bank account? What good is a separate account as an entrepreneur? We will try to explain it to you here, although ultimately it is your own choice and not an obligation. But we could never live without it 🙂
In the Self-Employed Payment Account Comparator we help you find the best checking account for your company. Why a separate checking account? You can read that here.
Why should you open a separate business bank account?
Let's start with the why. Why would you spend money on an extra checking account if you already have an excellent checking account? Can't you keep track of what money belongs to the company and what is for your private use? Then you use one smart and free online tool and you always know exactly where you stand. However, it wouldn't be easy. This way you don't really have a good overview of your financial situation. It could happen that a direct debit has been debited earlier than you expected, you spontaneously have to buy something and a payment has also been received earlier. Oh yes, and don't forget the groceries. Due to this combination of circumstances that are often beyond your control, you may end up spending money privately that you actually need for the business.
In addition, it is of course extra useful if you have a business savings account that is linked to your business self-employed checking account so that you can always put money aside. For example, for the VAT that you have to pay. And what about income tax? Not to mention unforeseen business costs such as your bus or laptop breaking down. To easily keep this separated, it is very wise to have separate accounts for this.
Mandatory self-employed bank account for some parties
Nowadays there are also various parties that require you to have a business checking account. If you use the services of MollieI would certainly do that, by the way, they require that you have a business account, even as a sole proprietorship. Otherwise, your hard-earned money will not be paid out. And when would you ever Mollie to use? Simple, if you use the aforementioned free accounting program from Gekko to send iDEAL links with your invoices and get paid faster. Works easily, you set it up once and you don't have to worry about it anymore. But then you must have a business account. This is just an example, and in our opinion certainly not the most important.
Keep your finances neatly separated
As an entrepreneur, it is important to have your finances and administration in order. As a private person too, of course, but that is not what this is about. This is not only a requirement for the Tax Authorities, it is also essential for running your business. Regardless of whether it is a large company or you are just starting out, it is very important to be able to easily understand how things are going.
Tax payments, we really can't ignore it
You have to pay different types of taxes at different times of the year. This tax usually depends on your income, such as VAT on the invoices you send and income tax. Other taxes depend on your use and activities. This includes road tax for the car or bus you use. There is a different payment moment for each type of tax.
You must pay the VAT every quarter. You can easily set aside the VAT amount for each invoice in a separate VAT savings account. That is of course a normal business savings account, but we call it the VAT savings account so that it is always clear what the money is intended for.
We do the same for income tax. Especially if you have to pay this at the end of the year, it is a very good idea to set aside the required amount every month. You then need to calculate how much you expect to pay, you can find various tools for this online.
You probably also want to make certain investments, now or in the future. You will also have to put money aside for this. Not to mention a buffer in case of emergency. It is also wise to set aside money in a separate account so that you know exactly how far you are from your goal of buying your new tools, car or computer.
Finally, we would always recommend that you “pay” yourself a fixed amount per month. This allows you to plan well and it is clear every month how much money you have to spend. It is understandable that it can be difficult with a variable income, for example due to project-based work or seasonal work. That is an extra reason to plan well, so that you create a stable income for yourself in these situations all year round.
To return to the business account. If you run these things through your private account, it is difficult to get a good overview of this and you can quickly make a mistake. But much more importantly, you do not have an easy overview of how much money you have in your various checking and savings accounts for business purposes to achieve your goals. We think this is a basic requirement for good business operations and a good night's sleep.
Self-employed Compare payment accounts
Which payment account you choose as a self-employed person, freelancer, general partnership or for your holding company depends on various factors. We have worked with various banks in recent years and gained experience. What is important for your situation may be completely unimportant for someone else. That is why we try to list the pros and cons for the different banks and self-employed checking accounts so that you can ultimately choose the right one for yourself.
Whether you prefer a new sofa like Knab or N26, a sustainable Triodos Bank or a large bank, we try to help you with that choice in our Self-Employed Bank Account Comparator.