Managing a Business A/C

N

noelodea

Guest
I am self employed,I have a business account with AIB to which all my customer cheques are lodged. In this account I have a standing order to pay my mobile phone bills which is purely for business use. However,I also have standing orders to pay the mortgage for our house,family VHI,my SSAI and my wifes SSAI,all these are with other banks. My question, is this an efficent and reccomended way to manage a business a/c,or should I have a seperate a/c for all these standing orders. The running costs for my business also come form this a/c,we basically live off my wifes salary,she is also self employed.
 
I would have thought that it was normal business practice to keep the business and personal banking issues completely separate and to have very clear lines of separation. What has your accountant recommended?
 
Thanks Clubman
This is my first year being self employed so i haven't spoken to an account about this. So,should I setup a personal account and move funds from the business a/c to pay all the standing orders.
 
I am not an expert in this area but I would have assumed that one would need separate bank accounts for business and personal use and then have clear records of how and when money was transferred between the two. Personally I would be inclined to speak to an accountant about this especially because it's the first year in business.
 
If you are a sole trader and very disciplined then you "could" mix your business and personal accounts, but I wouldn't suggest it.

In other words you're not legally obliged to separate them, but it's very much recommended.

If you are a Limited Company then they must be separate.

Definitely find an accountant, if possible based on a suggestion from a friend or collegue. I promise you that an accountant will more than pay for itself in terms of peace of mind (and may pay for itself in financial terms).

The risk of muddling business and personal accounts especially during start up is that when money get's tight (as it will) there's a temptation to dip into money that should have been put away for Taxes and other business expenses.
Don't go down that road.

Set up a business account and be disciplined.
But find an Accountant as quickly as possible.

-Rd
 
Noel

It really depends on how complicated your business accounts are. If you have only one invoice and one lodgement and one payment a month, then I would not go to the hassle of keeping two accounts. You may end up with an overdraft in one while you have cash in the other. But if there are more than maybe 3 transactions a month, then I would certainly open a separate bank account.

Brendan
 
You must log in or register to reply here.
Back
Top