Business Banking is Essential

 

It’s a big hassle to get a business bank account without a lot of fees and minimum balance.  I just want to keep things simple and run my business through my personal checking account. 

 

*cue a loooong sigh and the loosening of shoulders before typing*

 

The number one recommendation I make to all business owners, regardless of industry, age of business, income levels, profit margins, and legal structure is this:

 

Always.  Have.  A.  Dedicated.  Business.  Bank.  Account. 

 

It is impossible to stress this point enough.  Seriously, I’d be willing to send everyone a text every day reminding them to open a dedicated account for the business if I thought it would work.

 

Here are a few reasons why having a dedicated business bank account is crucial:

 

1. As I mentioned in an earlier post, mixing personal and business funds can create issues with bookkeeping and taxes. Having a separate bank account dedicated to your business helps prevent these issues from happening.
2. Certain business structures require you to have a separate business account. The Internal Revenue Service requires that LLCs, partnerships and corporations must be taxed separately from the business owners so the accounts must be kept separate as well.
3. Even if your business structure doesn’t require it, you’ll feel a stronger sense of professionalism if you maintain a separate bank account for your business.
4. You’ll be able to build credibility for your business, which will help other businesses take you more seriously. A check from “Business Name” is more professional than a check from “Jane Doe”.
5. Banks often require a business account to apply for financing or loans.

 

By the way, it’s not just the checking account that should be separate from your personal accounts.  Your business should have its own credit cards and direct payment processors (such as Stripe or PayPal).

 

While it may be more convenient to have only one bank account to track, your business needs … no, it deserves its own dedicated bank account to grow and thrive.

 

Questions or comments?  Let us know below!