If you've been operating a small side business from home, you might have been fine mingling your business finances with your personal bank accounts. However, if the business is picking up or if you're hoping to put a lot more into growing your business, you should look into opening a business checking account.
Read on to learn about three benefits that come from separating your business finances from your personal finances.
1. Get a better idea of how much your business is costing and paying.
A lot of people with home businesses don't have a clear idea of how much they make or spend for their business. If you move all your business dealings to a business checking account, you'll be able to see the income and expenses much easier. For example, you might need to spend 100 dollars a month on shipping materials if you mail things out to customers as part of your business. Before, you might have bought those things from your personal account on an as-needed basis. But with a business account, you can see and budget for just how much shipping materials cost your business, and you aren't paying for those materials out of the money you make at your full-time job.
This might not seem like a big deal to you, but a lot of people see that their home business is costlier to run than they thought, and you might find that you want to step up your game when it comes to cost-savings for your business.
2. Better records for future business loans and personal finance decisions.
If you ever need a loan to expand your business, the lender will want to see an active business account that shows a steady income of profits that will ensure the business loan gets paid off on time. If you ever want a loan for personal reasons, the business account will help you compile accurate profit and loss statements that will help you secure the financing you need.
3. Ability to pay yourself and potentially hire others.
Have you ever felt like the money from your home business just gets sucked into the void as it mingles with your other finances? A business account can make your paydays concrete and measurable. Instead of a little money trickling in here and there, you have money trickling into your business account, and you can schedule a large lump sum payday into your personal bank account to pay yourself for your business while leaving enough in the business account to pay for business expenses.Share