Millennial Pocket
  • Home
  • About
  • Banking
  • Financial Banking
  • Forex
  • Contact Us
No Result
View All Result
  • Home
  • About
  • Banking
  • Financial Banking
  • Forex
  • Contact Us
No Result
View All Result
Millennial Pocket
No Result
View All Result
Home Financial Banking

Three Reasons It’s Important to Have Separate Business and Personal Accounts

eoe86 by eoe86
August 11, 2022
in Financial Banking
0
Three Reasons It’s Important to Have Separate Business and Personal Accounts
194
SHARES
1.5k
VIEWS
Share on FacebookShare on Twitter

Related articles

February 3, 2023
Beware of Text Message Scam

Beware of Text Message Scam

January 17, 2023

Whether you’re a sole proprietor or have formed a limited liability company (LLC) or partnership, getting your first payment as a business owner is an accomplishment. Before you deposit that money into your personal account, it’s worthwhile to consider opening a separate bank account for your business.

If you’re not sure if it is better to have a separate business account, there are several reasons to open one and keep your business finances separate from your personal finances.

What’s the Difference Between a Business and a Personal Account?

On the surface, business accounts and personal accounts look very similar. You can open either a checking or savings account for personal use or for your company. The primary difference between the two is that you need to have a business to open a business account.

Business accounts might also have more restrictions and requirements than personal accounts. Some business checking accounts limit the number of monthly transactions or charge a small fee for each transaction. Other business savings accounts require you to keep a minimum balance or pay monthly maintenance fees. Mid Penn Bank offers free business checking accounts. Before you open a business account, read over the details closely to know what costs you might need to pay and learn about the 4 main types of bank accounts.

Before you open a business account, you’ll most likely need to provide proof that you own a business. The bank might ask you to provide a copy of your business license when you open the account. If you have an employer identification number (EIN), you’ll need that, too. Otherwise, you’ll need to provide your social security number.

Should You Have a Business and Personal Account in the Same Bank?

 If you already have a personal checking account or savings account at a bank, it’s good to open a business account there. You already have a relationship with the bank and are familiar with its customer service. If you choose a bank you already have a relationship with, it might be easier to open a business account, too.

Why Keep Personal and Business Bank Accounts Separate?

Why Keep Personal and Business Bank Accounts Separate?

Technically, you don’t need to open a separate account for your business if you’re a sole proprietor. LLCs and other corporation types do need a designated business account. Even if you don’t legally need to keep business and personal separate, there are several reasons why doing so makes sense.

1. Simplify Your Business Accounting

You simplify the accounting process by keeping your personal finances separate from your business finances. Since every financial transaction related to your company takes place in a designated account, you don’t have to review your bank statements monthly, highlighting the business transactions.

Instead, you can review your business bank statement each month to see how much revenue it earned and how many expenses it had. You can use the information in the business bank statement to help prepare a budget and track your company’s cash flow.

You can also link your business checking or saving account to other company accounts, such as a business credit card or mobile payment service.

2. Protect Your Personal Assets

Mixing business with personal finances can put your personal accounts at risk. If your business has difficulties and you don’t have separate accounts, you could lose personal assets if the company gets sued or has to file for bankruptcy. The same is true if your business has trouble repaying loans or other debts. If you’ve combined personal money with business money, you could lose everything.

Keeping things separate means your personal assets, such as your home, car and cash, will be safe even if your business encounters difficulties.

3. Streamline Taxes

Your business can most likely deduct various expenses when it’s time to file taxes. Keeping a separate business checking account makes it easier to track those expenses and report them on your tax return. The same is true for business income. When you have a dedicated business account, you can easily see what’s going in and out of the company.

You can simply hand your accountant a copy of your business’s bank statements to review when tax time comes around. You won’t have to spend hours sorting through combined statements, trying to find company expenses. Keeping everything separate means you’re less likely to miss expenses and more likely to get the most out of your tax return.

What Are the Benefits of Separate Bank Accounts?

Having a business bank account benefits your company in a few ways beyond simplifying accounting and streamlining tax filing.

1. Gives You Access to Cash Management Services

Business financing gives your company the funds to take the next steps or stay afloat in challenging times. Business financial services can help you manage cash flow, accounts receivable and accounts payable.

Business financial services allow you to improve your company’s cash flow and ensure that invoices get paid on time. It also helps your business build good credit.

Usually, you need to have a business account to take advantage of cash management services. Opening an account can be the first step to improving your company’s finances and ensuring it has a future.

2. Makes Your Business Look More Credible

Having a dedicated bank account for your company makes the business look more credible in the eyes of customers, investors and lenders. When you ask customers to make checks out to your company’s name rather than your own, your business looks more legitimate. A customer might feel more assured that you’ll deliver on your promises and that your products are worth it when they pay a company, not an individual.

Investors and lenders are also more likely to look favorably on a business with its own bank accounts. They can review the account statements to get a sense of the company’s financial health and determine whether investing in it or lending to it is a good idea.

3. Helps You Grow Your Business

Your business needs to grow to survive long-term. Having a designated business account is crucial for its growth. Once you have a business account, you can accept payments from customers more efficiently, get access to commercial loans and look good in the eyes of investors, all of which you need to take your company to the next level.

Open an Account With Mid Penn Bank Today

Open an Account With Mid Penn Bank Today

Mid Penn Bank offers multiple services for Pennsylvania-based businesses, from checking and savings accounts to business loans and cash management services. To learn more about our business services and open an account, contact us today.

The post Three Reasons It’s Important to Have Separate Business and Personal Accounts appeared first on Mid Penn Bank.

Share78Tweet49

Related Posts

by eoe86
February 3, 2023
0

How to Change Funding Account for Bill Pay1 Pick and choose which account you would like to use to pay...

Beware of Text Message Scam

Beware of Text Message Scam

by eoe86
January 17, 2023
0

DO NOT CLICK THE LINK! This text message is NOT from Centennial Bank! There are many ways that scammers may...

by eoe86
January 17, 2023
0

How to Enroll in Zelle Enrolling in Zelle will make it easier for you to send and receive money from...

Martin Luther King Jr. Day

Martin Luther King Jr. Day

by eoe86
January 12, 2023
0

Centennial Bank will be closed Monday, January 16, 2023, in observance of Martin Luther King Jr. Day.

by eoe86
January 10, 2023
0

How to Enroll in Zelle Enrolling in Zelle will make it easier for you to send and receive money from...

Load More
  • Trending
  • Comments
  • Latest
Inclement Weather Update

Inclement Weather Update

September 26, 2022

Wire Fraud

September 7, 2022

Online Banking will be unavailable tonight from 8pm CT/9pm ET – 8:15pm CT/9:15pm ET for routine maintenance. We apologize for any inconvenience.

September 20, 2022
What is Economic Inclusion?

What is Economic Inclusion?

September 19, 2022

0
Core Bank Breaks Ground on New Sarpy County Location

Core Bank Breaks Ground on New Sarpy County Location

0
How to be a Smart Holiday Shopper

How to be a Smart Holiday Shopper

0
Make Saving Part of Your Resolution

Make Saving Part of Your Resolution

0

February 3, 2023
National Women Physicians Day featuring Dr. Marjorie S. Bisenius, DO

National Women Physicians Day featuring Dr. Marjorie S. Bisenius, DO

February 3, 2023
Core Code Ambassador Spotlight: Courtney Miller

Core Code Ambassador Spotlight: Courtney Miller

January 31, 2023
Community Impact Award: Omaha Bridges Out of Poverty

Community Impact Award: Omaha Bridges Out of Poverty

January 27, 2023

About

Investors aim to make money and build wealth over time through the practise of investing. There are a variety of ways to generate future income, and an investment can be defined as any of these methods.

Recent Post

February 3, 2023
National Women Physicians Day featuring Dr. Marjorie S. Bisenius, DO

National Women Physicians Day featuring Dr. Marjorie S. Bisenius, DO

February 3, 2023

Categories

  • Banking
  • Financial Banking
  • Forex
  • Home
  • About
  • Forex
  • Banking
  • Financial Banking
  • Contact Us
  • Privacy Policy
  • Terms And Conditions

Copyright@2022 All rights reserved by Millennial Pocket

No Result
View All Result
  • Home
  • About
  • Banking
  • Financial Banking
  • Forex
  • Contact Us

Copyright@2022 All rights reserved by Millennial Pocket

Please wait...

Subscribe to our newsletter

Want to be notified when our article is published? Enter your email address and name below to be the first to know.
SIGN UP FOR NEWSLETTER NOW