You will probably think that you can just as well use your own checking account to receive your business payments? That it is a waste of money to pay extra for yet another bank account? What use is a separate account as an entrepreneur? Especially if you do not send that many invoices, you can do that perfectly well with your own private account, right?
We will try to explain it to you here, although it is ultimately your own choice and not an obligation. But we could never do without it. And we certainly would not want to do without a business checking and savings account! 🙂
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 get started with the Why start. Why spend money on an extra checking account when you already have a good checking account? You can keep track of which money is for business and which is for your private use, right? Then you use a 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.
By the way, it is good to see that there are now three Dutch banks where you can open a free business bank account, and at one of them you can also open a free private account.
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 Mollie or any other payment service provider, I would definitely do that btw, they require you to 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, of course, too, 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 company to set up and maintain good administration. Regardless of whether it is a large company or whether you are just starting out, it is very important to be able to easily gain insight into 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.
Just as it is super important for the Tax Authorities to keep good financial administration, you also need to keep a good financial administration for yourself. easy crm maintenance with all your contacts and relationships. Really!
But back to VAT and tax returns.
You must pay the VAT every quarter. For this you can easily set aside the VAT amount for each invoice on a separate VAT savings account. This is of course a regular 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.
Tip, check your bank accounts every now and then. Because things change every now and then, like bunq offering a free account again.