Many owners of new businesses think that it is more expedient to use the bank accounts they already have for both personal and business finances, but there are numerous reasons why this is not a desirable option. The U.S. Small Business Administration recommends that you should acquire a business account immediately upon initiating the handling of money or obtaining an Employer Identification Number from the IRS. Here is some information that will assist you in accomplishing this.

Advantages of Opening a Business Account

Separating your personal and business accounts helps you keep track of company finances more easily. At tax time, you will be able to benefit from deductions that are for businesses only. Even if your company has financial difficulties, your personal assets are protected when they are not connected to your business. Additionally, a separate business account for your company finances is an indication of professionalism.

Business Account Options

There are various options available for business accounts. For instance, a checking account allows you to write checks to handle your expenses, receive checks from clients, and deposit funds using a debit card. Some checking accounts are interest-bearing but charge a fee, while others are free but require a minimum deposit. Savings accounts allow you to build up a financial cushion for emergencies. Cash management accounts are versatile online accounts that combine the functions of both of these.

Selecting an Account for Your Business

As you search for the right account that suits the needs of your company, compare the various fees, requirements, services, and insurance protection. Find out about introductory offers that banks often use to attract businesses. Consider your company’s unique requirements and preferences.

Applying for a Business Account

When you are ready to open a business account, have documents ready with information such as your company’s legal name, Employer Identification Number (EIN), business address, phone number, and other contact information. As the owner, you will need to submit proof of identity. You may also need to provide your business license, and other documents depending on whether your company is a partnership, corporation, or LLC.

For more advice on opening a business account for your company, contact Toluca Lake Capital.