Why should your business have a business bank account?

Many small businesses are found to be still running their businesses from their personal accounts.

“It’s important to keep personal finances separate from your business account, so you do not fall into the trap of mixing up your bookkeeping, and you can clearly delineate between personal and business income and expenses”, said Hopewell Dube, owner of Mahobza Car Wash and Shisanyama in Kwa-Mashu. He further emphasised the importance of paying taxes and being compliant.

Business Development Manager at FNB Commercial, Francinah Phalatsi, adds that “The misconception is that running your business together with personal finances has the potential to save you money and spares you the hassles of opening and running separate bank accounts.  However, there are several considerations which offset any perceived benefits.”

These considerations include:

  1. Improved Efficiencies: Keeping your business and personal financial activities separate decreases the complexity of understanding the performance of your business.  The alternative is to manually separate the respective activities, which is time consuming and subject to human error.
  2. Meticulous Record Keeping: This allows you to easily see how much money is coming in and going out of your business. It also opens the door to categorising expenses, connecting accounting software to simplify your accounting, and seeing real-time cash flow.
  3. Understanding of Business Finances – by separating your business finances from your personal finances you are able to easily track, forecast and respond to fluctuations in your finances.
  4. Business Valuation – In the event that at some point in time you wish to value your business or even sell it you will require a clear separation of your business finances and a historic record of business activity, which a separate bank account will support.
  5. Credit Applications: Many businesses do not yet have audited financial statements as a record of financial performance. This is where business bank statements come in handy, as a record of your trading activity – from which financial institutions can make lending decisions. It is important to note that business behaviour also counts.  Staying on time with payments will help you improve a business credit score, and it’s easier to track business activity without personal finances muddling your statements.
  6. Professionalism: Having a business bank account gives your business a professional image and demonstrates that you are serious about your business. It also makes it easier for you to receive payments from customers, pay bills, pay employees and manage your finances.
  7. Compliance: Using a business bank account helps you to comply with regulatory requirements for businesses by allowing you to keep accurate financial records, which is helpful when it comes time to pay taxes.


These sentiments were echoed by Anthony Mandishona, community leader and owner of Tavern restaurant in Maponya Mall in Soweto. “Having a business account allows for one to formalise their business and to properly evaluate the business. It assists with making applications for other solutions within the bank such as insurance and credit by enabling the bank to track your business activity through a business bank account. It also helps you know what taxes to pay, how to pay your salary and separates your personal expenses – it just helps formalise your business in a structured manner”, said Anthony.

“To facilitate this, FNB has business transactional solutions in place that solve for the business bank account needs of entrepreneurs. For example, the First Business Zero account is designed specifically for sole proprietor businesses with an annual turnover of up to R5 million. The account can be opened on the FNB app or online within a few minutes using FNB’s “selfie” process to prove