Getting a business bank account is a wise decision if you want to join the estimated 33.2 million small companies that are already functioning in the United States and are getting ready to begin your venture. Combining your personal and business funds might have negative effects on security, liability, compliance, and other matters. Separating them also makes managing your company’s finances easier. Here are four more reasons that you require a business bank account.
1. It Could Be Necessary
A business bank account is frequently necessary for any organization that, from a legal perspective, conducts its operations independently of the owner. In general, partnerships, corporations, and limited liability businesses (LLCs) fall under this category. Keeping a company bank account allows you to keep the necessary level of isolation.
The law may not always compel you to have a business bank account if you are a lone entrepreneur. On the other hand, owning one may frequently be advantageous since it helps facilitate the tracking of your company’s income and spending.
2. It Offers Defense
If your company doesn’t have a bank account, you can be liable for something. A commingled corporate and personal account implies that the business and you aren’t operationally different entities, even if you’re using a corporation or LLC. Personal assets are therefore more likely to be at danger in legal proceedings or other comparable circumstances.
Furthermore, having a corporate bank account might lower your risk of identity theft and other related issues. The Federal Trade Commission (FTC) was notified of around 1.4 million cases of identity theft in 2021.Your Social Security Number (SSN) isn’t being exposed as much since business bank accounts frequently need employment identification numbers (EINs), which may lessen your vulnerability.
Business bank accounts may provide fraud insurance protection as well. These regulations lessen losses resulting from fraudulent transactions and prevent adverse comments from appearing on your company’s credit record.
3. It Makes Taxes Simpler
It’s usually easier to keep track of your tax filings and payments if you have a business bank account. Revenue and spending tracking is more easier, which enables businesses to complete their yearly reports and anticipate quarterly payments more precisely.
In addition, you lower your audit risk when you use a corporate bank account. All of your transactions, personal and business-related, might come under investigation if you do business out of a personal bank account. Audits pertaining to your firm will only cover your business accounts if you use a distinct business bank account.
4. It Makes Payments Simpler
You frequently receive benefits from a company bank account that you would not receive from a personal account. For instance, a lot of business bank accounts enable you to take payments from clients using credit cards. It’s usually an integrated function that makes accepting payments from outside parties easier.
Additional services connected to payments may also be made available through a business bank account. For instance, you could have access to merchant services or payroll processing. Furthermore, platform integration for bookkeeping is typical. Lastly, one factor that frequently enters the picture is the capacity to provide employees with debit cards, which facilitates the direct payment of company costs by approved staff members.
