Why It’s Important to Have a Specific Checking Account for Your Business

There are many reasons to have a separate checking account for your business

09/22/2017

Why It’s Important to Have a Specific Checking Account  for Your Business

Whether you’re operating a startup or a company with decades of history, it’s important to keep your business’ finances separate from your personal assets.
 
Simplify Your Record-Keeping
Business owners, especially those of small businesses, likely manage many facets of their company’s operations, including bookkeeping. They often find that having a separate business checking account can be extremely helpful in keeping business revenue and expenses organized and catalogued.

For one, it will make filing taxes for the business a lot easier and a lot less confusing. You can track expenses and revenue without having the extra headache of sorting through every transaction within the account to make sure it was for business, not personal, use. This will also help you to be able to substantiate expenses for your business should you be audited.

Also, the Internal Revenue Service (IRS) looks to make sure a business is actually what it says it is, and is not a “hobby” disguised as a business, adds TheBalance.com contributor Rosemary Peavler.

Having a specific business checking account, with business-only credit cards and statements of business-only purchases and transactions, will help you prove your business as legitimate in the eyes of the federal government.

Moreover, “if your business is incorporated, the IRS requires that you keep a separate business bank account. It doesn't matter if your business is a corporation or a partnership or an incorporated sole proprietorship. If you're incorporated, you must have a separate account,” reports Peavler.

Streamline Your Productivity
As your business grows, you may find you don’t have the time or the ability to get all of the business banking done with regard to daily operations and needs.

“If the weight of making deposits, signing debit card receipts and mailing checks is becoming too heavy, a business checking account gives you the option to delegate some daily tasks to your trusted employees,” states David McMillin in an article for Bankrate.com.

Simplify your business banking with North Shore Bank’s Business Online and Mobile Banking. Demo our Business Online Banking service today and explore the tools you need to manage your business better.

Improve Your Possibility for Growth
Unlike with personal checking accounts, business checking accounts allow for certain leniencies when it comes to requirements to help your business continue to thrive.

North Shore Bank offers a suite of business accounts to match your needs. Our experienced business bankers can help you get the most out of your account. 

Furthermore, you’ll set the stage for a strong business relationship with your banker, which will come in handy as your company grows and you look to borrow funds to expand. Lastly, having a specific business checking account can demonstrate the professionalism of your business to your vendors. If your payments are coming from your personal account, your business may seem less legitimate.

Having a specific business checking account is beneficial for a number of reasons; most importantly because it will help you to properly manage your business and increase your bottom line.
 

Published by North Shore Bank. Includes copyrighted material of IMakeNews, Inc. and its suppliers.

Related Blog Posts

Five Tools and Tricks to Simplify Your Savings Efforts

Online tools, automated savings, and small home improvements that can assist your savings goals. Full story...

Give Yourself an Annual Financial Check Up

Many people get an annual medical examination, but neglect to take the same care with their finances. Reviewing your financial affairs can pay dividends now and later. Full story...

Seven Tips for Naming a Product

Choosing a name for a product is important and needs to communicate the most information in the shortest amount of time.  Full story...