Do I dare ask…do you have a separate bank account for your business? Or are you using your personal account then driving yourself mad sifting through all your transactions to remember which were business expenses and which were personal?
I believe in having your own business account! It is super easy! Here are the steps you will most likely need to follow to open an account:
Go To Your Current Bank
Make it easy on yourself. Unless there’s a strong compelling incentive, I recommend opening your account with the bank you already have your personal accounts at. Whenever I have an issue it is so easy because I already know how to use the interface from my personal banking, and less verification is usually needed. And, transferring money between accounts is a LOT faster than transferring money between separate banks.
Documents You May Need
Since most likely your business is either an LLC or Sole Proprietor, (if you’re a Sole Proprietor, time to jump on the LLC train) you will only need a few documents. First, a copy of your federal taxpayer identification number (yes, register your business!) that is your Employer Identification Number (EIN).
If you’re a Sole Proprietor, rather than providing a EIN, you will use your social security number, so make sure to bring your card.
Don’t forget your ID, and just to be safe, a piece of mail that proves your address.
Some states will ask for a business license, or fictitious name certificate or statement, certificate of assumed name, or organization’s articles or bylaws.
But Why Do This?
Let me share a little bit about what I learned so you don't need to go through the tedious task of not having a personal business account. Maybe you are in the thick of this right now?! But throughout the year as you reconcile your business spending it can take hours and hours to pick through each bank statement for what you have spent or brought in during each month (“was that gas station part of that trip we went on? Or was that for that family session I did?”).
Not only does it make life easier administratively, but also emotionally. Imagine throughout the year, putting all the money you make into your personal savings account. In April, the IRS says that you owe several thousand dollars in taxes. It is SO much easier to pull that money from an account you’ve set aside for business transactions than pulling it from your personal savings.
So rather than dealing with the emotional dilemma and administrative headache, create a business account and only use it for your business. From there, you can connect to to your accounting app. As I’ve said before, I like Quickbooks. The app will track all your money going in and out of your business! Then you can reconcile those transactions at the end of each week, month, or quarter. It will keep you so much more organized. Your accountant will thank you as well!
It really is that simple! All my expenses and incomes go straight in and out of my business banking accounts. It makes everything much easier and smoother.
I hope you are on my email list because I shared how to take your business account one step further with organization, and set-up!