10th November 2026 - 5 min read
When you register as a sole proprietor, the law sees you and your business as one person. LHDN also taxes your business profit as part of your own income. So it feels natural to run everything through the personal account you already have.
A few months later, your sales and household bills are all on one bank statement, and you can’t tell if the business is making money. You can avoid this from the start with a separate business account and fixed monthly pay for yourself.
Money usually gets mixed when customers pay into your personal account. Your sales sit alongside your salary and money from family. You might then buy ingredients for the business with your personal card, and pay your car instalment or TNB bill from what customers paid you.
You also don’t set a fixed amount to pay yourself. You just spend from the account whenever you need to. Over a year, these habits add up to hundreds of transactions that are hard to sort into business or personal.
When everything goes through one account, you can’t easily see your profit. Say RM8,000 came into your account this month and RM7,000 went out. You don’t know how much of the RM7,000 was business costs and how much was family spending. A business that looks fine could be losing money, and you might be taking out more than it can afford.
Mixed accounts also cause problems at tax time. Under LHDN’s rules on business expenses, you can only deduct costs you spent to run the business, and you can’t claim personal spending. A business cost paid on your personal card is easy to forget, so you may pay more tax than you need to. You also have to keep your business records for seven years, and that’s much harder when they’re mixed with your own.
Getting a business loan is harder too. When you apply, the bank looks at your recent bank statements to see how much your business brings in. A statement full of shopping and family transfers makes it hard for the bank to see your sales.
Open a business current account in your business’s registered name before your first customer pays you. You’ll need your SSM registration to apply. At CIMB, for example, a sole proprietor can apply online for the Online Business Current Account or its Islamic version, the Online Business Current Account-i. You can do the whole application online, including checking your identity, so you don’t need to visit a branch or find an introducer.
Once the account is open, every customer payment goes into it. Put the account number on your invoices, and set up a DuitNow QR through CIMB Merchant Solutions so customers can pay straight into it. Pay all business costs from this account, or from a card you only use for the business. Take a photo of each receipt and save it in a folder for that month.
If you run a Sdn Bhd instead, the company must have its own account anyway, and money you take out counts as a salary, a director’s fee or a dividend.
Pick a fixed amount to pay yourself, and transfer it to your personal account on the same date each month. Accountants call this money drawings. As a sole proprietor, your drawings aren’t a business expense. You pay tax on the business’s profit, however much of it you take out.
When you’re just starting, pay yourself only what you need for basic bills, such as rent, food and transport. After three months, check it against your monthly profit, and raise it only when profit grows.
Set money aside for tax too, because no employer takes it from your business income each month. LHDN may also send you a CP500 notice, which asks you to pay tax in instalments during the year. Paying an instalment late can bring a 10% penalty. Move part of each month’s profit into a separate savings account and pay your tax from there. How much to keep depends on your income tax rate, which goes up as your yearly profit grows.
With one account for the business, working out your profit takes a few minutes at the end of each month. Take a home baker who sells RM6,000 of cakes in a month and pays herself RM2,500.
| Item | Amount |
| Sales | RM6,000 |
| Ingredients | RM2,100 |
| Packaging | RM300 |
| Delivery | RM400 |
| Profit | RM3,200 |
| Pay to herself | RM2,500 |
| Left in the business | RM700 |
Every cost in the table comes straight from her business bank statement. If she ran everything through her personal account, she’d see RM6,000 in and a mix of baking and household spending out. She couldn’t tell if RM2,500 a month was safe to take.
The RM700 left over can go towards her tax savings and a slow month. If profit falls below what she pays herself for two or three months in a row, the business is using up its savings. That’s the point to look again at her prices and costs, and to lower her monthly pay until profit recovers.
If you’re registering a business this month, work through our checklist for new businesses and open the business account at the same time. Set your pay date and amount before your first sale.
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Christina writes about personal finance with an eye for making the complicated feel straightforward. She is drawn to the everyday money decisions people face and genuinely enjoys finding the clearest way to explain them. Between articles, she is probably napping, on a hiking trail, or terrorising her sister’s cats.
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