1 in 3 micro-businesses failing to separate personal and business bank accounts
New research from banking app, Amaiz has found that just over 30% of micro-businesses don’t have a separate business bank account. These businesses risk muddling business and personal expenditure and breaking tax rules. The survey also found that 44% of micro-businesses are usually spending at least 3 hours a week on admin, with one in five spending around a day a week on getting the books in order.
500 micro businesses were asked about their challenges with managing their business in order to help Amaiz prioritise the services they offer on their new app (launched last year), that combines bookkeeping and banking.
Jayesh Gajparia a certified accountant at Amaiz explained; “You don’t legally need a dedicated business account, unless you’re a limited company, but there are several advantages to having one. For a start, there is a huge risk that you will muddle your personal and business costs and break tax rules without a dedicated business account, as it’s far more difficult to separate expenditure out. A business separate account also helps you locate electronic receipts and prepare for self-assessment.”
Modern business bank accounts now make it far easier to identify business-related expenses and get a clearer understanding of how your company is performing. Most personal current accounts don’t supply the functionality and options that a good banking app will have.
Jay concluded; “Normally small business owners are working really hard just to keep up with the needs of their customers and manage the business. I can understand why they don’t give this priority, but now is a great opportunity to review how the business works and put in place new systems to make life easier once the business is operating again. One of the key ones should be to open a business bank account that gives you the chance to manage your bookkeeping on the go. This will save businesses up to a day a week in admin.”