As a business owner, it’s super important to keep your business finances separate from your personal finances—and that means getting set up with a business bank account.
Head to your local bank or credit union and open a business checking account. It doesn’t matter if you just started your business and don’t have any revenue; the earlier on in the process you open your business bank account, the easier it is to keep your business finances separate from your personal finances.
- You should only use your business checking account for specific business activities, including:
- Depositing business income
- Processing business expenses
- Making payments to any other business accounts (including a business loan or business credit card)
- Paying yourself
Once you have your business checking account set up, you should also plan to open up two additional accounts: a general savings account (which allows you to save for large business purchases) and a tax savings account (which allows you to set money aside for taxes). While you can dip into your general savings account at your own discretion (it’s your savings, after all!), when it comes to your tax savings account, make sure to leave that money alone until tax day; the last thing you want is to find yourself short on funds when your taxes are due (there are few situations more challenging, time-consuming, and expensive for business owners than tax issues).
The last account you’ll want to tackle—if you decide to tackle it at all—is a business credit card. Business credit cards can be helpful for certain businesses—but they can also be detrimental to others, especially if they get you into debt you can’t repay. Before you decide to open a business credit card, make sure to really examine your relationship with credit, whether you can responsibly manage a business credit card, and whether it’s even necessary to start, run, and grow your business.
For more information on how to get banking set up for your small business, check out this guide on how to set up your business bank accounts *(and keep your business and personal finances separate in the process!) from Gusto.