When you start a business, you face a lot of new tasks at the beginning: setting up the accounting, registering with the authorities, and acquiring customers. In the course of business development, finding and setting up a separate account for the company is sometimes given a secondary priority. A common way of thinking is that similar to possible previous employment as an employee, banking transactions can first be done via the private account until the business is up and running. But that entails enormous risks for you as a private individual. Furthermore, setting up a corporate account is less complicated if you pay attention to a few points and follow the right strategy. We’ll enlighten you on the problems of running a personal account and show you how to use a strategy to find your best business account.
Why do you need a business account?
Setting up an account for companies is not only a hassle but also involves more costs than a private account, despite all the baiting offers from the banks.
Therefore, the idea of using a private account for the company is quite obvious. What are the reasons against it?
1. Terms and conditions of the banks for private customers
2. Problems with the tax office in determining taxation
3. Access to the account for other employees
4. Simplified accounting
5. The legal requirement for corporations
Bank contract terms
Most financial institutions require a separate account to be opened for business purposes. Therefore, the use of a private account for corporate purposes is excluded from the contract terms. In the event of an infringement, you risk the termination of your private account by the bank for violating the conditions.
Problems with the tax office
The tax authorities must distinguish between the taxation of private income and business income. Likewise, private expenses and business expenses are viewed differently when it comes to determining trade tax.
When maintaining a private account for both purposes, you must be able to make a clean separation here. The accounting principle applies to the company: No posting without a receipt.
When managing a business account, it is also easier for the tax advisor to allocate all accounting documents to the corresponding income and expenses in the business account at the end of the year.
A much more important aspect, however, is the effect of the joint account in the event of financial difficulties, ie economic difficulties or if bankruptcy is imminent. Then creditors or authorities can ensure that the account is blocked. This means that private use of the account is no longer possible.
Access for other employees
Depending on the size of the company, it makes sense to give employees selected for banking transactions access to the account as well. Especially when the company is growing and you cannot handle all the finances personally, you certainly do not want your employees to have insight into your private financial situation. You should have your company account for this.
Simplified accounting
In general, business and private finances should be separated. This not only facilitates the overview of the personal financial situation but also the annual financial statements at the end of the financial year.
The background here is the clear separation of z. B. private assets and fixed assets of the company for the tax office. Is the PC used at home or for business purposes? If this is not properly documented, you can e.g. not stop paying through a corporate account is more likely to be recognized for commercial use than a personal account.
Legal requirements for corporations
If you want to set up a partnership, such as a GbR or OHG (but also as a self-employed freelancer), you are not obliged to have a company account. For a corporation such as B. a GmbH, AG, or UG, the legislator requires a business account, ie this proof must also be provided to the authorities.
How do I find my best corporate account?
All banks have bait offers and make many promises to win you over as a customer. You should know one thing: There is no corporate account that suits every company! Due to the multitude of requirements for a business account and the choice of banks and accounts, there is only one business account that suits your needs.
To clearly define your requirements, you must first carry out a self-analysis and determine what your company account must offer.
You must divide the individual services into three categories:
1. Necessary service
2. Superfluous options
3. Additional free services
In a simple matrix you then enter the points that are important to you, for example:
- daily availability of cash
- debit cards
- credit cards
- direct personal advice
- number of transfers
- availability of the bank
- possibility of subsidized loans or credits to bridge short-term liquidity bottlenecks
- account maintenance fee and monthly fixed costs
- interest on balances
- overdraft interest
- costs for bookings
- special charges for cash deposits and withdrawals
In the second step, you evaluate the individual points and the priorities set to fix the ideal options for your new company account. Using this matrix, you can already decide whether you prefer to opt for an online bank or a branch bank. Decisive for a presence bank are e.g. necessities such as daily cash availability:
If you run a kiosk or a shop in the city where customers pay directly and mostly in cash, you are dependent on having changed at all times. So the account should be at a branch bank nearby that offers cash deposits and withdrawals daily and ideally free of charge.
However, if you have an online shop where transactions are made exclusively via credit cards or online payment services such as PayPal, an online bank brings you more advantages.
If you have already made this rough classification, collect offers from branch banks or direct banks and compare them in terms of fulfilling the points on your wish list.
You can also make the comparison using a matrix. In the first column, you list the individual points, sorted by priority. You start with the highest importance and give it a high score. After that come the less important options with lower ratings.
The following columns then contain the offers from ideally five different banks. You assign a predetermined number of points for each criterion.
Similar to a product test by Stiftung Warentest, you add up all the points for each of the bank offers at the end and get an overall score. The highest number of points in this evaluation is then the right offer for your new company account.
Cost
With the strategy explained above, you have an easy way to find your way through the thicket of the many bank offers and find a corporate account for the needs of your company.
But you will have noticed that we have not yet considered the topic of costs. Of course, this must also be included in the matrix.
The problem when considering the costs is that a company account can cost between a few euros and amounts in the almost three-digit range per month. But this is only a snapshot. The market for business accounts is highly competitive and therefore very dynamic.
This means that there are always new offers that easily lead to confusion. To counter this, you have to keep a clear head and not fall for bait offers.
Even if it is said that the account management fee will be waived in the first six months, you should take a look at the transfer fees, withdrawal fees, or the costs for the debit or credit cards.
There are account models with low fixed costs, ie monthly account fees or annual card expenses, but high variable costs for each transfer or each cash deposit or withdrawal.
Depending on whether you have many or few transactions per month or year, such a version is better or worse for your business. Therefore, do not look at the costs of the models you are considering until you know which options you prioritize.
Take a closer look at the following prices:
- Account Maintenance Fees
- EC and credit cards (also second cards)
- Overdraft and overdraft interest
- Fees for bank transfers, direct debits, and standing orders
- Creation of sub-accounts
- Cash Deposits and Withdrawals
- Credit interest or negative interest for a high credit balance
Ultimately, you need to look at the overall package of the account model to get an objective overview.
There are also help portals with which you can compare costs. One of them is e.g. company does. You should also be careful with the portals and check how up-to-date the listed offers are or whether only a part of the bank offers known to you have been taken into account.
Need for advice
Another important point is your wish for advice from the bank and the use of the account for further purposes. This is specifically about the establishment of loans or subsidies, but also about future support for plans for IPOs, international transactions, or business with unknown companies abroad and corresponding safeguards via the bank.
For such needs, you should consider the necessary need for advice. This can usually only be covered by branch banks, where after a longer affiliation you will also receive a corresponding credit rating with which the bank will support you in your plans.
Business account opening
The following documents are normally required to set up your company account with a branch bank:
- Application to open an account
- Business registration and tax number
- In the case of partnerships, the articles of association
- In the case of corporations, the entry in the commercial register, guarantees from the shareholders, and certified copies of the incorporation documents, if applicable
- Identity card
- Schufa information
- Existing Account Agreements
- Personal account statements
Depending on the legal form of your company, the necessary documents may differ. Therefore, you should always ask the respective bank individually what is required.
The actual opening can usually be done on the first visit. If this is too time-consuming for you, there is the alternative of opening your company account online.
This saves time but involves additional online steps. After completing the online account opening application, you must identify yourself. The bank must be sure that the applicant exists.
There are two options for this: the online identification program and the PostIdent procedure.
Online Identification Program
A VideoIdent procedure is used here, with which you are connected to an employee of the bank. They will then take a photo of you and your ID. For this procedure, you should have a working video camera on your PC or mobile phone. It doesn’t work without this technical equipment.
PostIdent procedure
This process gives you a section to print out. With this and your identity card, you can go to any Deutsche Post branch. There you present your ID and sign the form in the presence of the postman. The postman will also confirm your identity.
After identifying yourself, the application will be recognized as legitimate and the opening process will start.
Business account questions
What is the difference between a person and a business checking account?
From the banks’ point of view, the main difference lies in the consumer protection regulations and the retention obligation.
For consumer protection reasons, the bank must make the private current account and the individual fee-based options more transparent than with a business account. In addition, there is a statutory retention requirement of ten years for account statements and receipts from company accounts. For personal accounts, this period is much shorter.
Are there also online portals for the search for my optimal company account?
Yes, there are. If you google a business account comparison, you will find a large number of online portals that give you a quick overview of all kinds of account models for companies. This will also include your new company account. All you have to do is know how to filter out the accounts with your analyzed requirements from the mass of suggestions.
To do this, you should have the company type and size, estimated bookings per month, credit card requests, and other conditions ready and filter accordingly. In the end, you will get to the respective banks via the corresponding links and can start the opening process there.
But make sure you use a good comparison tool. Unfortunately, many calculation tools are insufficient. You can recognize a good portal by the fact that both the number of corporate accounts offered and the number of providers are as high as possible. In addition, the filter options should be available using setting parameters.