How To Organize Your Business Bank Accounts

by Mehdi BAH

Starting a business also includes opening a business account. However, many young entrepreneurs like to postpone this and use the private account for transactions. Not so clever! In this specialist article, you will find out why you should use multiple accounts and why you should not use your private account to conduct business transactions.


The law does not prescribe a business account. But – very few founders know this – banks generally prohibit business transactions in private accounts in their terms and conditions. Besides, in the USA, corporations are forced to have a company account. Regardless of this, a separate company account is recommended, and ideally immediately after the company is founded, before the first transactions take place.

Why you should urgently separate your business and private accounts

The top priority in your payment transactions, overview! Nothing is worse than when you can no longer tell what income or sales are and what expenses are for your company and which are personal for you. This is also shown by the Federal Statistical Office: In 2014, it recorded over 134,871 bankruptcies. The most common causes:

  1. bad payment behavior of customers,
  2. lack of controlling,
  3. Financing gaps,
  4. inadequate accounts receivable management.

Say No overview of finances. So good reasons to control your financial flows. It works best with separate accounts.

The  2-account method: business and private

You can better organize your business with 2 accounts: If you are planning a Facebook campaign, you can see at a glance whether there is enough money for it. You do not have to mentally book your entrepreneurial wages as private expenses for business operations, you transfer them.

All business income and expenses are recorded in the business account. Founders cannot forget about costs relevant to the company. And you no longer have to label private bookings.

Also, Read: What You Should Know before Incorporating A Business

Overview of the Advantages of the 2-Accounts Method

1. 2-Accounts method Gives you better Overview

Since all income and expenses take place on two accounts, you can get an overview of your financial resources at any time. This is not only convenient, but it also saves a lot of time.

2. 2-Accounts method Keeps Your finances safer

Anyone who frequently travels abroad and buys services or products does not necessarily want to have a credit card with them, which is linked to the business account with the income. The expense account card is more secure.

3. 2-Accounts method For Loans

Entrepreneurs can never have enough capital. In the future, they may need to take out a loan. You should choose the first account (for earnings) carefully. In a credit negotiation, the bank will see the company’s earnings, but not the expenses.

The early decision for a business account speaks for the fact that a later changeover is associated with a lot of effort. Entrepreneurs would have to inform each partner and customer about the account change. This would make your partners and customers do unnecessary work.

The 3-Account method: Even more secure with the second business account

Entrepreneurs who don’t want to leave anything to change can open a second business account. In this case, you have a two-account model including a capital account. The first business account is only responsible for income. Entrepreneurs use the second business account for expenses.

The Business Capital Account from volkswagenbank.de offers such a solution. It is a flexible investment account that brings entrepreneurs the following benefits:

  • Interest is credited monthly
  • Due to the compound interest effect, assets are built up,
  • the notice period is 30 days

Capital accounts are usually linked directly to the business account. Entrepreneurs can conveniently operate their capital account via online banking and transfer money between the two accounts as required.

The 4- or 5-account method: liquidity & interest with overnight accounts

Many start-ups have already fallen into this trap: Because the sales tax only had to be paid to the tax office at the end of the year, they already spent it the months before. Bad, because now you have to borrow the tax debt somehow. A call money account that is only intended for tax reserves can help.

A second call money account should be filled with investment reserves and collateral. Experts recommend saving running operating costs for at least six months.

TARGO BANK – online accounting the right account for your company

As already confirmed, some entrepreneurs (e.g. freelancers and sole traders) can use private checking accounts for their transactions. Whether a personal or professional account pays off depends on the circumstances:

  • An online shop that traditionally has many bookings benefits from a business account with free bookings.
  • Startups with few bookings opt for a business account with low annual fees.

In both cases, entrepreneurs can expect a disadvantage:

  • The online shop pays a higher annual fee for the low booking fees.
  • The startup pays a higher fee for individual bookings.

It is not the individual costs that count for entrepreneurs, but their total. So you need to check exactly which account solution is the cheapest for your needs.

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