Business vs. Personal
As a small business owner, when you're your own boss, I'm sure it can be tempting to do all of your banking within one account. This article from bankrate.com breaks down the reasons why that may not be a great idea...
Key features
Personal
Personal
- Personal checking accounts are designed to meet everyday financial needs with straightforward features and easy access to money.
- A personal checking account provides essential tools for everyday money management such as check-writing, ATM access, debit card purchases and direct deposit for your paychecks.
- These accounts may also have features like automatic bill-paying, easy transfers to other accounts and the ability to send and receive funds electronically.
Business
- Business checking accounts offer the same features as personal accounts, but they are designed to help you run and grow your business.
- Some banks offer merchant services that let you accept credit card payments.
- They may also provide access to a line of credit to support businesses with financial flexibility.
- Business accounts also tend to offer more detailed reporting and integrations with accounting software to help you keep your bookkeeping up to date.
Why open a separate business account?
Besides the special features available, having a separate account for your business offers several vital benefits. It helps you track your profitability, simplifies tax reporting and could even help you qualify for business loans.
Besides the special features available, having a separate account for your business offers several vital benefits. It helps you track your profitability, simplifies tax reporting and could even help you qualify for business loans.
Plus, if you keep your business and personal funds intermingled, a court could rule that your business is not really separate from you — even if you’ve set up a limited liability company (LLC) or corporation. That leaves your personal assets vulnerable if your business gets sued or goes bankrupt.
Who needs a business checking account?
A business checking account is usually a good idea for anyone running a business, regardless of size. And even that small side hustle you’re doing could be considered a business — and worth separating from your personal finances.
A business checking account is usually a good idea for anyone running a business, regardless of size. And even that small side hustle you’re doing could be considered a business — and worth separating from your personal finances.
There you have it. You can check out the full article linked above for even more info about business vs. personal financing. Have a good one folks!