While it makes sense for large corporations and big businesses to have their own set of corporate accounts, there are also a lot of general benefits that can help any business that come with having a separate business account. Even if you’re a sole proprietor or single employee business, here are some benefits that having a business bank account can have on your operations.
Protect Your Personal Identity
With identity theft and bank fraud being a real threat, sharing your personal and business expenses and earnings in one account can put both your personal finances and your business at risk. Keeping a separate business account helps keep your business finances and operations safe should anything happen to your personal account, and vice versa. Depending on your demographic and industry, keeping your business account separate can also save you from being contacted personally for business related matters.
Credit Card Payments
Business accounts can also help make things easier for your customers. Due to the nature of credit card payments, personal accounts can not be paid with a credit card. Having a separate business account can open up more potential payment options to your customers, helping increase sales and improve customer relations.
Tax Prep
Having a business account helps make tax season a lot less stressful. If everything is coming in and out of your personal account, it can sometimes be difficult to itemize or determine which payments, purchases and income is from the business and which is for personal use. Having two separate accounts helps make this distinction extremely clear and helps speed up the tax preparation process considerably.
Required for Partnerships or Sale of Business
If you ever decide to form a partnership or incorporated, or if you simply are looking to sell off the business down the line, a business bank account is required to do any of these things. Without one, the process comes to a dead halt until you make a business bank account and get all the finances sorted.
There are many other benefits to having a business bank account separate from your personal finances, but overall it just makes the process of running a business a lot more organized. It’s best to start early with a business bank account so everything is organized properly from the start.