Posted on: 18 October 2019
Running a small business is not easy. You will have many responsibilities over even a short period of time. Unfortunately, many small business owners tend to use their own personal bank accounts because they feel it is the easiest option. However, having a separate account solely for your small business can be beneficial. Here are a few reasons even small business owners need separate bank accounts.
Protect Your Personal Finances
One of the most important reasons to separate your accounts is to protect your personal finances.
For example, if you are using your personal bank account for your business purposes, you may end up mixing money, which can affect your ability to budget for both personal and business-related needs. You may end up spending personal funds on business needs or spend business profits on personal expenses.
Having a separate business account, even though you feel your business is too small for one, will help with the organization of your personal and professional financials.
Improved Ease of Taxes
As with any business owner, you will be responsible for paying taxes yearly or quarterly depending on your preferences. If your personal and business financials are combined, navigating tax time can become pretty challenging.
A separate account for your business will help you get and stay organized, so you will know exactly how much you are bringing in and paying out throughout the year. This will also help you and accounting professionals determine the appropriate amount of taxes you need to pay to avoid confusion, legal issues, and costly tax penalties.
In most cases, you will need to write checks, submit payments, send invoices, and receive payments to run your small business. Whether you are dealing with customers and clients or vendors, using your personal bank account to handle these financial tasks will not look very professional.
A bank account dedicated to your small business will enhance professionalism, allowing you to customize checks and invoices with your business, not personal, information. The more professional your small business appears, the better reputation and potential growth your small business will have.
You may be surprised to learn that some banks offer discounted rates and even perks for having a business account. Free checks and free tax assistance, for instance, may be available depending on the bank.
Utilizing the business account will not only improve your business function and give you some peace of mind, but the reduced bank fees ensure you are making a great investment in your business.
For more information, contact a business account banking service in your area.Share