Starting A Home-Based Business? Understanding Why Having A Business Checking Account Is Important
Posted on: 28 December 2018
If you have already begun the process of turning your dream for a home-based business into a reality, congratulations, you are already well ahead of most would-be entrepreneurs! While many people entertain the idea every year, few will actually commit to taking the risks and doing the hard work required for their business to succeed.
Even the ones who do move ahead to launch their business should expect continuing challenges. Some of these challenges, however, can be avoided by taking the time to lay out a sound administrative structure, including opening a business checking account to be used solely for your business. If you have not yet given your business its own checking account, here are three reasons why you need to so as soon as possible.
Accountability
Co-mingling the funds from your new business with those of your household can cause accounting confusion for the finances of both your home and your business. Maintaining a separate business checking account allows business owners to more easily see and track income and expenditures, allowing them to more easily see any changes that need to be made in order to be profitable.
Taxation
Filing your business taxes can be a trying experience for new business owners who have been so busy with growing their business that they have not kept good records. By establishing a business checking account and then using it to manage all business income and expenses, including supplies, payroll, and overhead costs, their checking account statements will supply the itemized information needed for filing taxes and handling other financial matters for the business.
Privacy
Keeping your personal information safe and secure is another challenge for new business owners. As your business grows, you will likely need to bring in additional staff members to handle the administrative work that accompanies the process of growing a successful business.
Businesses that co-mingle their business money with the funds used to run their household are putting their privacy at risk, especially if an employee must be granted access to their personal financial information in order to handle business finances. By using a dedicated business checking account instead, your personal information is protected and your staff will still be able to perform the administrative work that you need them to perform.
To learn more about the importance of having a business checking account, or to apply for one for your business venture, contact the new accounts manager at a reputable bank or credit union in your area.
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