How Business Banking for Freelancer Should Look

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Probably the step into your self-employment as a freelancer was already a huge one, which cost you a lot of grey hair and sleepless nights. But the prospect of finally being able to do what you have always dreamed of as a freelancer was certainly your greatest motivation. To carry out the professional activity in which one really invests body and soul is the great dream of many people. And you have made it – congratulations. And even if you are still dreaming of your freelancer job with your heart project, you are already on the right track.

The path to self-employment is sometimes marked by unpleasant things like paperwork and dealing with authorities. And when you finally start to pursue your actual work, it quickly becomes clear that you also have to think about your finances as a freelancer. When you reflect the term banking, do you also think of dreary bank branches, eternal waiting times and a bank consultant who will talk your ear off? In the 21st century, this no longer has to be the situation. We provide you with a guide that helps you find the banking solutions you really need as a freelancer. 

(NEWS: We have noticed that Fiverr and Penta pursue the same goal: We support freelancers like you with digital solutions. Therefore we decided to celebrate this common ground in a partnership. As a Penta customer, you will now receive discounts for Fiverr.)  

Banking also works completely digital

As a freelancer you should be aware that you are completely responsible for your own time management. This also means that you should always consider which tasks are really worthwhile for you at the end of the day. Nonsense walks into a bank branch are certainly not one of them. Digitalization has entered diverse areas of life, making business banking completely digital. As a freelancer you need a business account first of all. Many banking platforms now offer you a digital business account that can be opened online. The digital business banking platform Penta, for example, offers you as a freelancer to open a business account in less than 15 minutes. After just 48 hours and after a quick check of your details, your digital business account will be fully available to you. 

When opening a bank account for your freelance work, you will be asked to provide some documents. In most cases, it starts with an identification document, i.e. an identity card or passport, to confirm your personal identity. Other required documents concerning your activity are the business registration and under certain circumstances also the business tax certificate or the VAT certificate in Germany. This may sound like a lot of paperwork at first, but you can believe us that the paperwork for larger companies in Germany looks much more complex. As a freelancer you usually only need to go to the tax office. Here you will also get your tax number. Afterwards you can complete the opening of your business account from the comfort of your sofa at home. You can simply upload the required documents. 

Business account opened and what happens next? 

So far so good! You have decided to open a digital business account. However, you should read a few things in the fine print before you complete the opening process. You will receive all of your earnings on your new account. Make sure that you can participate in the usual payment transactions. You should make sure that you can make SEPA transfers, batch payments, standing orders, direct debits and international payments. Also as a freelancer you might need cash from time to time or you want to pay something for your business in stores. That’s why you need a card that you can withdraw money from any ATM worldwide or pay at the point of sale. By the way, your account balance is protected by the EU deposit insurance up to 100.000 €.

When things become more complicated 

Probably no one considers usual payments as a challenge when you are a freelancer.  It might look different if your payments are becoming increasingly complex or if you want to better analyze and organize your payment flows. Many banking solutions are already exhausted here. The opening of additional sub-accounts also pays off often as a good idea for freelancers. Payment flows can be separated from each other and you can keep track of certain areas. For example, payments that you execute only once a year, or reserves and savings can be easily separated from your usual transactions.  

Accounting and taxes don’t have to be your problem

Now we have already talked about how to keep your finances under control, even as they become increasingly complex. Nevertheless, there is always a topic waiting for you as a freelancer, which may even prevent some people from realizing their professional dreams. The topics accounting and taxation in Germany are probably the last reasons why you decided to start as a freelancer. But unfortunately you have to get through them somehow. 

Therefore you should ensure a financial service provider which offers the integration of your accounting software into your bank account. This way, your transactions can automatically synchronized and you don’t have to do everything manually. Your tax accountant can also access all the information he or she needs more easily. This is the best way to connect your accounting to your business banking and leave the work to digitalization. By the way, you can easily create tax reserves on a sub-account. 

Banking as flexible as you are 

Many freelancers pursue a passion that is independent of time and place. As a designer, artist, marketer, copywriter, editor, software engineer and so on, it’s often not very important from where and when you work. This is also one of the main reasons why people decide to become self-employed. Some freelancers choose to live as digital nomads, travel the world and work from anywhere. No matter how flexible you are or not – your business banking should be. With a mobile banking app for your smartphone or PC, you can keep track of your finances. Business banking doesn’t have to be complicated.

Test your Penta business account now for four months for free and benefit from innovative business banking for freelancers. 

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