08 Nov When Should I Open A Separate Business Account?
Every business needs its own business account as soon as possible! If you have a business that takes in money and you don’t have a separate business account, consider setting one up as soon as possible! While there are legal reasons to keep your company books separate from your personal finances, it also makes it a lot easier come tax time!
Setting up your business bank account should be easy and stress-free. According to the US Small Business Administration:
To set up an account for an LLC all you need is your: “Business Tax Identification Number, Limited Liability Partnership Agreement showing business name, and a business organizing document filed with and certified by the state official.”
Below we have listed just a few reasons why you should open a business account:
When you have a separate business account, it is so much easier to track money coming in and going out; this allows you to stay organized and run your business efficiently. You will not need expensive tracking software. Professionalism is the key. Don’t get confused for a tiny startup again. Opening a separate bank account for your business is just one way to make you look like a legitimate business!
It makes it easier to see how profitable your company is. When all your business money and expenses are in one place, you can get the whole picture a lot easier. Knowing your company finances will help you make changes in the future.
The IRS recommends it. Not only is it simpler and easier, but it also makes any audits run as smooth as possible. Audits are already a hassle, don’t make it any harder on yourself!
If your personal finances and business expenses are both floating around the same bank account, you can risk the potential to look like a fake business. If you do not have a separate account, you could make yourself personally liable for anything that happens to your LLC. Don’t let yourself get caught with mixed accounts if something unfortunate happens to your company or LLC.
Just because you start your business a bank account, doesn’t mean that you have to rush to buy accounting and bookkeeping software. As your company grows and tracking expenses become a hassle, you will need a proper bookkeeping and accounting!
It doesn’t matter what kind of business you own or how you have it corporately structured; it is always a great idea to set up a completely spare business bank account.
Do you know where your business is heading? To learn more about how we can simplify your accounting process, call us at 727.828.9945 to schedule your free consultation.
About Accounting & Business Partners
Accounting & Business Partners is a CPA firm with an efficient bookkeeping department. We believe that success lies in numbers. However, the drive behind the numbers is what truly matters. That’s why we look beyond the financial statements.