So you opened a business checking account and you’ve been operating for a while, right? Your business is flourishing and you’re able to start hiring your first employees, paying yourself, and setting some money aside. You are also noticing certain trends as it pertains to your business cash flow and revenue. At this point you’re wondering how to better manage the finances for your business and what to if you in regards to your bank account. I have the perfect post curated just for you. Continue reading below to get the inside scoop on 5 Bank Accounts You Need As A Business Owner.
If you are starting a business one of the first action steps you should take is opening a Business Account. I understand with the excitement of opening your business, a lot gets pushed to the back burner, but waiting to open a Business Account should not be one of those steps you leave behind. Operating under a legitimate business account and not your own personal account will provide various benefits when it comes tax time, hiring an accountant, paying yourself, etc.
After the initial step of opening your first account, you may notice there is a need to expand into additional accounts in order to keep track of your company’s expenses and revenue easier. Below I am going to list my top 5 Accounts as a Boutique Owner for MPRINT that I utilize throughout the year.
- Main/Revenue Generating Account- This is where all of the money generated through revenue, services, etc. is deposited into. So to be clear, any of the money you make is deposited specifically into this account. Bills are not paid, transactions are not debited from this account.
- Operating Account- All bills for the Operation are paid from this account. Money from the Revenue Generating account is transferred into this one in order to cover the expenses of the business. Expenses include: rent, utilities, inventory, credit card bill, cost of website, etc.
- Salary Account- This is the account where employee salaries are paid. Again, money from the Revenue Generating Account is transferred into this account to cover all employee salaries.
- Savings Account- Just as you would with your personal finances, you should have a savings account for your business. If you have an extremely good month where you profit more money than usual, it should be placed into your Business Savings account to protect your business when you have unexpected expenses pop up, inclement weather but your employees still need to be paid, and also covering the overhead especially if you operate out of a brick and mortar location.
- Credit Card- These accounts can be beneficial for office supplies, gas, company lunches, dinners, etc. It also establishes some line of credit with your bank which is always good to have in your back pocket.
I also created a digital form of this blog post for my YouTube Channel. You can watch directly from the video below.
Where to Go From Here
Now that you have knowledge of how having 5 Business Bank Accounts can be beneficial for your business, it’s time to execute. Speak with a representative about the process to expand your account from one to five. I hope you found this information to be helpful. Leave some comments down below! I would love to hear from you.