It’s not uncommon for small businesses, or those just getting started, to use personal bank accounts. However, we recommend splitting your business and personal finances into two separate accounts – sooner rather than later. Some business owners think they don’t make enough money or have enough activity for an account, but that simply isn’t the case.
Not only does a business account make tending to your books more convenient, but it’s also so much more efficient. Instead of weeding through what is a business expenses versus a personal expense, you know that everything in the account is for business. No need for shuffling or wondering. And, with this, comes the knowledge you need to make informed business decisions. Using just your business financials, you can make the best decisions based on what your numbers are telling you.
Having your own business account is wise should the IRS ever audit you. It’s so important to have a trail, and this ensures that. When everything is mixed together is when you’ll have an issue. If your business is registered legally, then you definitely need a separate account. This will help you establish business credit, as well.
If you’re unsure how to begin separating your business and personal finances, contact us for assistance.