Check, Please! A Great Way to Manage Business Finances
In your line of work, you may be wearing many hats at any given time, one of which is to manage finances. It can be tempting to keep things as simple as possible by having a single bank account for both your business and personal finances. In fact, data shows 35% of business owners admit they use their personal account for business-related expenses.
Benefits of Keeping Personal and Business Finances Separate
There are a few important reasons to have separate personal and business accounts:
- Makes it simpler to file taxes – When your personal and business finances are jumbled together, it can make tax time a nightmare. It’s easier to take advantage of tax deductions when finances are kept separate.
- Helps prevent/ease audits – If for any reason your accounts need to undergo an audit, having them combined may cause additional issues for you. Having two separate accounts is also an easy way to distinguish between expenses.
- Increases credibility of your business – Instead of your name, payments and transactions would take place under your business. This provides more credibility.
- Provides an extra level of security – Keeping these funds separate can help provide more security.
More Than Just Accounts
Many small business owners select the same financial institution to house their business accounts as they do their personal accounts, simply out of convenience, without additional research. A full-service financial institution, such as Regions, can provide not only personal and small business accounts, but also more services such as wealth management, so you can plan for your future. Make sure you do your due diligence to ensure you’re getting everything you need from your bank.
Opening a Business Account
Be sure to investigate the details of your new business account institution, including:
- Are there any fees for this account, and if so, what are they?
- Is there a minimum balance requirement?
- Is there a minimum opening deposit?
- Do you have a special introductory offer?
- Does it cost money to close the account?
- Is there a business credit card available?
- What, if any, are the deposit/transaction limits?
- Do you offer additional features specifically for business owners?
More Professional Help
At a certain point, it may also be helpful to hire an accountant to help manage finances. This “point” may differ for different businesses, including your business growing faster than you can handle, needing extra help, or a tax issue you can’t handle on your own.
One thing you don’t have to worry about as a small business owner? Helping your customers finance their home improvement projects. Regions | EnerBank has decades of experience in home improvement lending and has designed products specifically with contractors and homeowners in mind. Best of all? We handle all the day-to-day needs of a financing program so you can focus on what’s most important — being a great contractor. To learn more, fill out the form on this page or visit our website.
This blog post is intended for educational purposes and not as tax or financial advice. If you have specific questions regarding your business, please contact a qualified tax professional or financial advisor.
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