Business account fitness series: Tip #4– Avoid handling transactions on behalf of others using the company account

Your business account is meant solely for your company's financial transactions. Using it to send or receive payments on behalf of others may seem like a harmless shortcut or a friendly gesture, but it exposes your business to serious risks such as fraud, financial crime and regulatory scrutiny.

Some business owners may occasionally process payments for friends, partners or third parties through their business accounts as a well-intentioned favour.　However, this practice can complicate your financial records and raise concerns about potential fraud and financial crime. To protect your company's integrity, it's essential to keep your account strictly for transactions directly tied to your operations.

Only process transactions that directly relate to your company's goods, services, contractual obligations or business operations. Avoid handling funds or assets that belong to others or fall outside your business scope. This includes declining requests to send money on behalf of friends or business partners, refusing to receive funds intended for others, and not acting as an intermediary for other parties. Handling payments for others can complicate your financial records and may trigger investigations by banks or regulators, potentially disrupting your operations.

Clear policies and staff awareness are crucial. A well-trained team that can identify and prevent unauthorised use of your business account is key to protecting your financial integrity and ensuring operational continuity.

Scenario 1: Favour falls flat

Eric, the owner of an electronics trading firm, often helps his sister by paying a clothing supplier from his business account. Since this payment is unrelated to Eric’s business nature, his bank eventually suspended the payment function of Eric’s company account and requested Eric to provide business documents to verify the legitimacy of the transfer. Eric’s involvement, though well-intentioned, is muddling his company’s financial records and raising suspicions of money laundering.

In summary: Business accounts are intended solely for your company's business-related transactions. Using them to handle third-party payments or unrelated funds can lead to unexpected and serious complications.

Scenario 2: Stay on the safe side

Evelyn owns a design agency in Hong Kong. Her uncle once asked if he could use Evelyn’s company account to send money to his daughter’s boarding school in the UK, claiming it would be ‘more convenient.’ Evelyn politely declined, explaining that her business account is strictly for company-related transactions. Instead, she advised her uncle to use a personal bank channel or a licensed remittance provider. Later that month, Evelyn’s bank conducted a routine review of client accounts. Because all of Evelyn’s transactions were consistent with her stated business activity, the review proceeded smoothly without any issues.

In summary: Using your business account only for legitimate, business-related payments protects both you and your company. Clear separation of personal and business funds and activities reduces compliance risks, safeguards day-to-day operations, and strengthens trust with financial institutions.

Why this matters

Keeping your business account dedicated to your company’s transactions minimises the risk of fraud and ensures clarity in your financial records. It prevents misuse that could lead to regulatory penalties or expose your company to fraudulent schemes.

Tip #4 account fitness checklist:

In Hong Kong's dynamic business environment, every layer of risk management counts. Be disciplined with your business account and it will pay off in trust, security and smooth operations.

As your trusted banking partner, we're here to support you as you begin your business fitness journey and work towards achieving your ambitions. To learn more about how to establish proper business account practices, visit https://www.business.hsbc.com.hk/en-gb/campaigns/account-fitness.

Download the complete “Business Account Fitness Guide” now for more real-world business scenarios to help you understand how to establish proper business account practices for smooth operations.