One of the most common questions we receive is: Do I really need to keep my business and personal finances separate?
The answer is a resounding yes.
Certain business structures are required by law to keep personal and business finances separate. In almost all instances, it is best to separate personal and business finances.
Why? Keeping your personal and business finances separate helps:
How do you keep your business and personal finances independent from one another?
The first and most important action to take is to establish a business bank account as soon as possible.
Establishing a business bank account costs no money, little time, and there’s a high return on investment because it can save you time and money in the long run, especially during tax season or if you ever need to hire professional services through an accountant or lawyer. Some banks even offer incentives for opening a business bank account.
If you operate your business as a sole proprietor, you’re probably wondering: does a sole proprietorship need a business bank account? The answer is yes, for the same reasons listed above.
Here’s what you need to do to open a business bank account.
Opening a business bank account is easy, and many banks allow you to create one online.
You’ll need to provide your employee identification number (EIN) and proof of identification for yourself and your business (usually your social security number and business registration). You may also need to make an initial deposit, which varies from bank to bank. That’s it!
Looking for accounting and bookkeeping support for your business? Schedule a consultation with our team.