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Keeping your business and personal finances separate

It can be easy to blur the lines between your business and personal finances. But keeping your finances separate is vital for growing your business. For instance, it helps to keep track of your business performance and keeps your accounts tidy – especially important for ensuring you meet all your tax obligations. Here are five tips to help you separate out your business and personal finances.

02

Open a business bank account

When you start a business, one of the first things you should do is open a business bank account. This not only helps you to put a stake in the ground for your business, but you can get your finances in order from the start.

All your business income and expenses can then go through this account, making it easier for you to keep track of your business’ finances and monitor its performance. Come tax time you or your accountant will be able to refer to your bank transactions or statements, making your tax return preparation process quicker and easier.

For an account that suits smaller businesses, take a look at ASB’s Business Focus. It’s a simple day-to-day transaction account specifically designed to save you money as your business grows. And it comes with extra benefits too. For the first six months you'll pay no card account fee on your new ASB Visa Business, and for a reduced fee, you'll get access to our online business banking platform ASB FastNet Business.

03

Understand what are business expenses

Many expenses that are incurred for your business are tax deductible, so it’s important to distinguish between personal expenses and business expenses to ensure the correct amount of tax is paid.

There are different rules for different expenses, so do your research. If in doubt, check with Inland Revenue or your accountant. 

04

Consider a business credit card

A business credit card may be a good idea to separate business spend, help manage cash flow and reduce the need to carry cash.

With a separate business credit card you’ll also be able to build up a credit history for your business, which could be used for future lending applications.

Check out an ASB business credit card. All our business credit cards come with up to 50 days interest free on purchases, the convenience of paying at millions of locations worldwide and you can use ASB FastNet Classic or ASB FastNet Business to keep track of your credit card account. There are also many other great benefits depending on the type of ASB business credit card suitable for you and your business.

What’s more, if you open an ASB Business Focus account, for the first six months you’ll pay no card account fee on a new ASB Visa Business.

05

Get business funding if you need it

If you need extra money for your business, it’s important you get the right amount and type of borrowing to meet the needs of you and your business.

It's a good idea to speak with your bank, accountant and lawyer about the most suitable form of financing for your business. 

Here are some of the ways your business may be able to get extra funding:

  • A business overdraft lets you borrow up to a set limit, and you can repay and redraw funds up to your credit limit any time. It’s a convenient way to manage your everyday cash flow.
  • A term loan gives you a set amount of funding for a set amount of time. You can structure the loan amount and term to suit your business plans and budget.
  • A revolving credit facility gives you a higher credit limit than an overdraft and offers a complete banking package – with a transaction account, call account (savings), overdraft and lending facility. A great option if you need ongoing access to funds.
  • Asset finance is a loan that lets you buy, replace or refinance assets, while providing them as security for the loan.

If you need extra funding for your business, try using Help Me Choose to find the right business loan for your needs.

5 bonus tips to get your business finances running smoothly

  • Consider opening a separate account and regularly put amounts of money into it to help with your cash flow when your tax liabilities are due.
  • Create a business budget to help you figure out how much you have to spend, and to help manage your cash flow.
  • Think about your online banking requirements. If you need to operate a two-to-sign account or require more than one user with controlled access, you might benefit from using ASB FastNet Business.
  • Consider using a financial management tool, like Visa IntelliLink® Spend Management, MYOB or Xero, as it’ll make managing your cash flow and finances easier.
  • Save time by using instant deposit and fast count services with cash.

Next steps

Enquire online

Tell us about your business and how we can help, and one of our team will get back to you.

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0800 272 222

Visit a branch

Visit us at one of our many branches across New Zealand.

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Other helpful guides

The above information is a guide only and should not be relied on as it does not take into account your personal financial situation. ASB’s lending criteria, terms and fees apply.

Business Focus is available to businesses with turnover less than $2m per annum. Pay no Visa Business card account fee for the first 6 months. At the end of this period, the standard card account fee applies.

ASBKeeping your business and personal finances separate