Many sole proprietors and professionals operating small businesses tend to use their personal bank accounts for their business dealings – and why not, you might ask?
The problem is there are legitimate and practical reasons for having both, with convenience and efficiency – two things valuable to any business – being the biggest incentives to separating business and personal bank accounts.
After all, it’s most likely your business will grow and the few transactions here and there will slowly become more. Eventually, you’ll get to the point where it becomes difficult to simply keep track of things.
If you’re small enough to keep your own books, you’ll soon realise bookkeeping takes more time as your personal finances start mingling with your business ones.
Alternatively, if you have an accountant, they might start charging you more for all the extra work and time it takes to weed out your personal transactions from your business ones.
Business bank accounts often offer similar features to your personal account, but a business bank account, first off, will be opened in the name of your business. This will add credibility and legitimacy to your business. Operators with a business bank account can also add to your branding, and helps your customers identify you more easily when it comes to billing and online transactions. It’s easy to understand that a separate business bank account can help you to organise your books more effectively. All your business transactions are recorded accurately and you have a proper record of funds received as well as payments and expenses made in the business’ name.