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.
Different business structures have varying degrees of control and responsibility, so it's important to consider the right structure for you.
The business.govt.nz website has a handy guide to help you compare business structures, with more details on how each business structure works. Every business is different – so like any important business decision, we suggest you talk with your lawyer and accountant before choosing a structure for your business.
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.
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.
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.
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:
If you need extra funding for your business, try using Help Me Choose to find the right business loan for your needs.
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.