Many people dream of becoming entrepreneurs, and often the biggest...
Letting technology do the heavy lifting for certain monotonous tasks...
Accurate accounting is the bedrock of any successful...
Distinguishing between independent contractors (1099) and employees (W-2)...
November 30, 2020
Some entrepreneurs believe they only need to bring in cash and put it into their personal accounts, but many entrepreneurs don’t know the benefits of having a business bank account. Whichever industry you choose, you’ll probably want to set up a business bank account as your company grows. It can make tax calculations easy while also helping you save money, avoid hassles and manage risks. Taking the time to set it up correctly at the beginning can allow you to prepare your business for future growth.
Check out these advantages of having a business bank account.
Opening a business bank account can make it simpler for you to manage your business as it grows. By having a corporate account, you can separate your personal and business transactions, which makes it easier to keep accurate books and records. When you set up a business bank account, any client payments or sales revenues can go directly to your business account.
While opening a business, many entrepreneurs choose to set up a limited liability company (LLC) or a corporation to limit their business’ liability. Having an LLC or a corporation separates your personal assets from business assets and keeps them safe. By separating your personal and business finances, you will be better protected from liabilities in the event of a lawsuit against your business.
Having a dedicated business bank account shows that you’re open for business and is especially important as you scale your operations. The fact that your business name appears on checks and other payment methods can give clients and customers the sense that you’re here to stay.
Opening a business bank account can let you manage your day-to-day business finances easily, so you can plan to improve and grow. The IRS (Internal Revenue System) outlines the requirements you must meet to indicate you are performing business activities, like maintaining complete and accurate books and records. Having a business bank account can help you meet those criteria, more easily allowing you to separate your personal income and expenses from those of your business.
When all of your business income and expenses are visible in the same account, it’s easier to keep track of which clients have paid you, where you spend more or less than expected and all processed payments so far. This can lead to much better recordkeeping for reference.
A business bank account will be even more effective if you establish an employer ID number (EIN). You can use this number for your bank account to handle the payment of income, sales or payroll taxes, increasing the security of your bank account. With a business account, if you want to enter a partnership, you won’t have to give a partner access to your personal bank account.
Since most business owners use credit cards, you’ll have to begin accepting them as you expand your business. You can’t typically receive credit card payments with a personal bank account, so you should have a business bank account. Business bank accounts can accept credit cards as well as other payment methods and make the transaction process seamless.
A separate business bank account makes it easier to track your tax-deductible expenses and save time and money while filing your tax returns. When all of your business expenses are available in one place, you can be more efficient in calculating your taxes. These expenses may include advertising, buying business equipment, business travel, health insurance premiums, retirement plan contributions and more.
Having a business bank account can help you understand the tax amount you owe, the money you need to set aside for taxes and how to make necessary estimated tax payments throughout the year.
Anyone willing to buy your business will check the history of your financial transactions, inspect your financial documents and review supporting bank statements. A bank statement represents a form of third-party verification of financial transactions. A business bank account enables you to provide the bank statements to a prospective buyer without disclosing personal information.
Opening a business bank account can help you track your business’ transactions that you’ll need to show for a business loan or line of credit in the future. Many banks may also offer you a business credit card that can help you build a credit history for your business. Having a good credit history under your business’ name can help you qualify for loans with lower interest rates and more favorable payment terms.
Having a bank account for business finances can provide you with certain perks and rewards as part of your overall business banking relationship. Some business accounts and credit cards may also offer special cash-back rewards or long repayment periods for your monthly bills to help you manage your spending. Some business banking advantages you may find include the following:
Our team is made up of seasoned professionals who bring years of industry experience to the table. You gain a trusted advisor who understands your business inside out.
Say goodbye to the hassles of hiring, training and managing in-house finance teams. You will never have to worry about unexpected leave of absence or retraining new employees.
Whether you’re a small business or a global powerhouse, our solutions scale with your needs. We eliminate inefficiencies, reduce costs and help you focus on growing your business.
Accurate accounting is the bedrock of any successful business operation. Yet, medium-sized businesses—those that have grown beyond the small-business stage...
Distinguishing between independent contractors (1099) and employees (W-2) is a pivotal compliance matter for U.S. businesses. Misclassification can result in...
Spring symbolizes renewal, making it an apt metaphor for startups aiming to secure fresh capital to fuel their next growth...
Payroll is more than just issuing paychecks—it’s a complex, high-stakes process that can significantly impact employee satisfaction, legal compliance, and...
For startups seeking sustainable growth, every quarter provides a treasure trove of data—but Q2 data can be particularly revealing. By...
By the time Q2 rolls around, many startups have a clearer picture of their performance and market positioning compared to...
For many startups, the summer months can be a dual-edged sword. On one hand, warmer weather and looming vacations can...
Tax season often triggers stress and complexity—especially for startups laser-focused on building products, acquiring customers, and scaling operations. Yet savvy...
The halfway mark of any given year is more than just a date on the calendar; it’s a valuable checkpoint...