4.4 - Establishing Bank accounts

Question 1

Importance of Establishing Bank Accounts

Answer 1

It is important that the business has a separate bank account from that of the owner, so that the performance of the business can be established. A Bank Account will aim to provide business information on its cash position and ability to make its cash payments. A business bank account will provide evidence of its cash transactions for the ATO, to complete its GST and Income Tax.

Question 2

Choosing the Best Bank Accounts

Answer 2

• It is important that the business looks at the fees that the bank charges, and interest costs that it will secure on its deposits.
• A business may also need a bank account that provides credit cards so that its employees may pay business expenses.
• A business may also want an overdraft option when it may not have enough funds available to cover its bills.
• Finally, a business should look at the location of the bank branches so that it is able to get to it, to complete its bank needs.

Question 3

Factors to be Considered

Answer 3

• Fees
• Interest Rates
• Overdraft Facility
• Credit Cards
• Convenience
• Customer Support