Business Banking 101: Separating Finances

Why You Need a Business Bank Account

Mixing personal and business finances is a common mistake for new entrepreneurs. However, opening a dedicated business bank account is essential for several reasons.

Liability Protection

One of the main benefits of forming an LLC or Corporation is limited liability protection. This "corporate veil" separates your personal assets from your business liabilities. Commingling funds can pierce this veil, putting your personal assets at risk.

Professionalism

Paying clients and vendors from a personal account looks unprofessional. A business account adds credibility and trust to your operations.

Simplified Accounting and Tax Filing

When tax season arrives, having separate accounts makes it much easier to track business expenses and income. This simplifies bookkeeping and ensures you don't miss out on deductible expenses.

Start your business on the right foot by opening a business bank account as soon as you register your entity.