As you all know, I’m busy outside of my day job. In addition to my full time gig as a financial analyst, I run two companies. I have a blogging and online media company and a flash mob company. To protect myself from personal liability, I have an LLC for each. To ensure my LLC does its job, I have business bank accounts for both.
Professional
One great reason to open a business bank account for your small business, no matter how small, is for professionalism. With a business bank account you can accept payments written to your company and you can write checks from your company.
This is huge in the eyes of a customer. Rather than writing a check to your name, they write a check to your business. This gives a sense of confidence and professionalism that using a personal name to do business does not.
Easy to Track
Tracking your business income and expenses is important. Your business income and expenses are listed differently on your taxes than personal income from a job. Tracking that separately can be a huge help when tax season comes around.
All business expenses in the United States can be deducted from your income to lower your tax liability. If you can’t find records for all of your business expenses, you can’t deduct them.
To make it easier to track, open a business account and put all of your business revenue and expenses through that account so you can easily find your records when you need them.
Find a Bank That Meets Your Needs
Not all banks are created equal. Some business accounts come with very high fees. Others come with bad customer service or poor offerings. Make sure you find a bank that fits your business’ needs and will be responsive when you need help.
With so many commercial finance institutions, it may be difficult to find the best match. Here are a few things to look for when starting out:
- No fee, or low fee, business checking
- Merchant support for accepting credit cards
- Free credit and debit card options
- Multiple business account types
Some banks only offer simple accounts for businesses, like checking and savings. Other institutions have more complex offerings like factoring. If you are struggling to raise capital, factoring is a great option for small businesses. If you are not familiar, factoring is when a business sells its accounts receivables to a third party at a discount to get the cash up front.
Whatever you do, make sure your bank meets your needs and does not charge you too much to do it. If you spend the time to find the right bank, you will find yourself in a great, long-term financial relationship.
Image by NNECAPA / flickr
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This is a great idea. I love it for the professionalism, the better protection against personal liability, and the convenience of accounting. Thanks for the suggestion!
I want free online business checking. Not having any luck finding it!
I’m in the same spot. I went with a local bank for checking because I couldn’t find a good online option.