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Why you should keep your personal and small business bank accounts separate.

posted on Tuesday, September 11, 2018 in Business

image of a business man on his computer

Managing finances can be complicated for small business owners, especially when your business is just getting started. Many entrepreneurs skip the important step of opening a business bank account, and instead use personal accounts to manage their business expenses.

5 reasons to open a business bank account

  1. Organization – By keeping business and personal expenses separate, filing taxes on your business will be much simpler, because you won’t have to try to distinguish between the two at tax time.
     
  2. Liability protection – A business bank account can give you added protection during hard times. If you use a personal account for your business finances, creditors will be able to seize personal finances to collect on debt.
     
  3. More payment options for customers – Many business accounts can connect business owners with payment services that will allow them to accept credit cards as payment. While there are often maintenance and transaction fees associated with these services, being able to access them will give customers more payment methods which could mean more sales.
     
  4. Potential for future expansion – Opening a business bank account when you start your business is a great way to get to know your local bank. Then, as your business grows, and more financing is needed, it will be less intimidating to request a loan from the bank.

    Related content – How Financial Services Support Small Business Growth
     
  5. Multiple signers – With a business bank account, you can designate others to be able to sign checks and make payments on behalf of the business. By having a trusted employee assigned to such tasks, your time could be freed up to spend on other responsibilities.
     

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