More than a few people start a business by… just starting business transactions. These same people may or may not know the principles of business. No matter what business knowledge you do or do not have when you get started, I want you to be sure to know this one thing: open a business bank account. This is important. Do not comingle your personal and business funds. This will allow you to know the full financial status of your business. There are many reasons to open a business bank account, but here are the two biggest reasons that impact all businesses:
- Know your business’ financial health.Separating your personal account and your business account gives you a clear financial picture of your business: the money it brings in, the expenses it pays out, how much profit is made, track if the business is growing or not, etc… Having one account dedicated to just your business allows you to have the correct numbers for an accurate view of your business money.
- Filing taxes more painless and easier. Tax time is a dreaded time of year for those with complicated money situations. Businesses definitely have a lot going on financially: expenses that are and are not looked at as tax deductible, tax deductible expenses that have to be separated by categories recognized by the Internal Revenue Service, a certain percentage of the home and other personal expenses that may be a tax factor for business, etc… Crunching these additional numbers is easier when you already have your base business finances organized and ready for review.
Getting a business bank account is important, as well as, a part of growing and having a legitimate business. Open a bank account as soon as you can. Depending on the type of business structure that you have, each bank will require certain documents: E.I.N, social, articles of corporation, business license, and/or certificate of DBA. Be sure to ask questions so that you have everything you need before you go to the financial institution. There are plenty of banks and credit unions that will help your business grow by fulfilling your banking needs.