Having a savings account for your business can be extremely beneficial. When it starts getting hard to keep your funds separate and figuring out which goes where, then it’s probably time to get a business savings account.
I’ve had clients who don’t have business accounts and keep everything all lumped together. It’s such a disaster in many areas.
There are many advantages:
1. Good records.
Do you withdraw and deposit your business money into your personal accounts? This isn’t always the best idea because you are mixing different money together and this can be hard to keep track of. Filing taxes at the end of the year might be a disaster. Looking for a business savings account can be extremely beneficial for you and your business.
2. Filing taxes.
Continuing from above, filing your taxes will be MUCH easier. Instead of scouring through tons of receipts and invoices, you can look at one account and no exactly that it is from your business and your business only. Getting a business account is good in this situation as well.
As said above, it’s always a disaster when my clients have everything limped together. Financial forensics analysts always have to be hired because the IRS is not a huge fan of when everything is all in one account because it is hard to tell who is being honest about different expenses and income amounts.
3. To keep everything professional.
Honestly, keeping everything separate is more professional than lumping it all together with your personal account. Having clients and customers pay you to your personal account will not seem as professional in their eyes as if you had an actual business account (this is especially true if this client is new to you).