Benefits of Opening a Designated Business Checking Account

Sep 21, 2022
Benefits of Opening a Designated Business Checking Account

Even though it is typically advisable to open a business checking account separate from your personal account, a lot of new business owners and solopreneurs choose not to, usually because they don't think it's necessary or worth the trouble. While small businesses and side gigs can often blend incoming funds and personal money for a while, business bookkeeping is much simpler and far more accurate when the business revenue and expense tracking are isolated from personal income and spending. If your business is growing and bookkeeping and tax preparation are becoming time-consuming headaches, it may be time to open a separate business checking account that allows for more accurate budgeting and forecasting.

Some reasons even small businesses can benefit from a designated business checking account:

Helps with budgeting and cash flow management

When you mix your personal and business funds, you have no way to instantly assess your business cash flow. Until you reconcile your business spending with your other accounts—probably at the end of the month—your checking account balance tells you very little about the ratio of personal money to business revenue.

Saves bookkeeping time

The more transactions you have to analyze, the longer your bookkeeping will take. Having to separate out business transactions from personal ones every single month means spending time examining and tracing a lot of transactions that have nothing to do with your business. Bookkeeping and account reconciling can be far less time-consuming when all account withdrawals and deposits are directly related to business expenses.

Simplifies tax prep

At some point, your tax preparation will require you to separate your business income from other forms of income; to benefit from business tax deductions, you will also need a clear separation of your spending so that business-only expenses can be itemized. When your personal and business accounts are mixed, finding deductions takes a lot more time, and some of those eligible deductions may be missed entirely.

Looks more professional

Issuing personal checks for business purposes sends the message that your business is small and, in some cases, amateurish. The checks you issue from a business account should be customized with your business logo for a much more professional appearance. Online check printing software allows you to customize your business checks with any features and design elements you choose; you can easily upload an image of your logo and a stored signature for a polished, professional appearance.

Managing a business checking account does not have to be an added headache thanks to an array of online business bookkeeping tools that simplify financial management for businesses of all sizes. Checkeeper, a leading online check printing and mailing service, can make managing your business checking account simple:

· Professional business checks can be printed on demand with automatic MICR formatting of your account and routing numbers

· Checks can be customized with any layout or design elements desired, including business logo

· User permissions can allow (and limit) access for a business partner, employee, or bookkeeping assistant

· Cloud technology and mobile access mean that your business checks can be created from anywhere

· Full-service, same-day mailing options are available so that you never have to touch an envelope or stamp

Having a separate checking account for business use can benefit a small business in many ways even if the number of transactions each month is small. Putting business funds in its own account keeps you more organized and leads to more accurate, time-efficient bookkeeping while helping you establish good credit along the way should you ever want to get a business loan or credit card. The account will also be in place in case your business grows to the point you need to create a payroll system for employees or if you decide to attract investors. The right check printing and mailing service can simplify check-issuing and reduce the overall time needed for bookkeeping.