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Financial management

Benefits of keeping personal and business finances separate

ANZ Financially Ready

2022-08-14 04:30

Key points

  • Separating your personal and business finances can save you time and help you feel in control
  • Accessing funding for your business can be more straightforward if your finances are separate
  • Exposing your personal savings to business fluctuations can impact your lifestyle

Many small business owners find it tricky to balance their personal and work lives. Keeping your personal and business finances separate is an important step toward having a clear view of your business’s financial position.

From making it easier to apply for business loans to protecting your personal savings, there are many benefits to separating your personal and business finances.

Why separate your personal and business finances?

Paul Presland, General Manager ANZ Small Business explains the importance of separating personal from business finances.


You’ll save time on business administration

Lodging tax returns, business activity statements and other essential business administration tasks can be time-consuming. Every hour spent on business administration is an hour that could be spent on serving customers, developing marketing plans or other income-generating activities.

Keeping business and personal accounts separate will save you time as you’ll be able to track your income and expenses more easily. When accounts are kept separate, business financials are far simpler to interpret, report and file, freeing up time for you to run your business.

Your tax deductions will be clearer

Most business owners want to maximise their tax deductions, but this can be tricky when a personal account is used for business purposes. When business expenses are run through one, dedicated business account, tax deductions can easily be found in one place.

When using a personal account for business purposes, important tax deductions could be overlooked and remain unclaimed. Instead of missing out on tax deductions (or wasting time trawling through multiple accounts to find a deduction), use a business account for all business expenses.

It makes accessing funding easier

Having a business bank account is typically necessary when accessing some types of funding, such as grants and rebates.

Having solid financial records for your business is also essential when applying for external funding such as bank loans and overdrafts or trying to attract capital from investors.

If you want to tap into lending solutions to grow your business, having robust, independent financial data for your business will help ensure you’re in the best position to secure the funding you need.

Your personal savings won’t be at risk

Dipping into your personal savings to fund a business could put your household finances at risk. All businesses have ups and downs, so exposing your personal savings to business fluctuations could impact your ability to save, invest and pay for life’s necessities.

Having a dedicated business bank account will help you to plan and pay for all those irregular expenses that come with business ownership – without dipping into your personal savings.

You’ll draw a line between your personal and business credit histories

Banks and other financial institutions use credit history data to assess loan serviceability, credit card applications, and more.

When you’re establishing a new business, you may be tempted to use your personal credit to secure your business account. But when you mix your personal and business finances, you may find it more difficult and complicated to apply for home loans, credit cards and other forms of finance in the future.

Having separate accounts for business and personal transactions helps you to minimise risk and develop the separate personal and business credit histories needed to help secure your financial future.

Selling your business may be simpler

If you’re intending to sell your business, you’ll want to put your best foot forward. The financial position of your business will need to be crystal clear to attract buyers.

Having years of accurate financial data should not only make the sales process quicker and easier, but it might also boost the sale price of the business.

If you get in the habit of dipping into your personal savings to fund your business or run business expenses through your personal accounts, potential buyers might not understand the true financial position of your business.

Next steps

Spend less time untangling your finances with a dedicated business transaction account.

Learn more about ANZ Business Essentials or chat with one of our local business bankers

Benefits of keeping personal and business finances separate
Business specialist
ANZ Financially Ready

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This is general information only, so it doesn’t take into account your objectives, financial situation or needs. ANZ is not giving you advice or recommendations (including tax advice), and there may be other ways to manage finances, planning and decisions for your business.

Read the ANZ Financial Services Guide (PDF) and, if applicable, the product Terms and Conditions. Carefully consider what's right for you, and ask your lawyer, accountant or financial planner if you need help. 

Any tools, checklists or calculators produce results based on the limited information you provide so they are an estimate or guide only. As they are incomplete, they are not a substitute for professional advice.

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