You may wonder if opening a business checking account is worth the time it takes to set up. Think about how many hours you spend sorting through your business and personal records in a single report. You’ll save time if you open a business checking account. Here are a few other reasons to head to the bank and separate your business and personal expenses.
Build Credibility
Part of running a successful business is creating a professional image. Paying vendors with personal checks makes your business look more like a hobby than a job. Using personal checks can also indicate that you just started a business. Personalized business checks show that you’re committed to your business and can build your credibility.
Automate Payroll
Image via Flickr by Dave Dugdale
Getting your payroll correct is daunting when you complete this task manually using spreadsheets. When you have a business checking account, you can automate the payroll process. The software lets you manage payroll and print out secure checks on a laser printer. You’ll focus more time on running your company and growing sales.
Automated payroll systems can trim your expenses, too. You can cut processing costs up to 80 percent by limiting errors.
Apply for an Employer Identification Number (EIN) with the IRS before you set up your business bank account. Check state laws to find out if you must file a fictitious name statement and register your business.
Simplify Tax Preparation
Imagine sorting through bank statements and picking out your business transactions from your personal account at tax time. That’s a bookkeeping nightmare. Why not skip the hassle and stop wasting valuable time by opening a business checking account? You’ll also have accurate records to complete your tax return at the end of the year.
Protect Personal Assets
Legal problems and accidents are part of running a business, and these things can happen to you. Protecting your personal assets is essential. The first step in protecting your personal property from business liability issues is to form a corporation or limited liability company.
You must have a business account to set up a corporate entity. When your business generates a lot of transactions, you also put your identity at risk when you send out personal checks. Use a business account to limit your exposure to fraudsters who commit identity theft.
Accept Credit Cards
Are you turning customers away who want to pay with debit and credit cards? Visit your bank or credit union to set up a merchant account so you can accept card payments. If you’ve incorporated the business, you must use a business checking account to set up a credit card processing account.
Even if you run a sole proprietorship, using your personal account for credit card transactions can get messy. You’ll need to sort out your business payments and sales tax. Simplify your sales records with a business checking account.
Stop using your personal checking account and show customers and vendors that you own a legitimate business. A business checking account can also help you automate payroll systems and keep accurate records.
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