Keeping your business and personal finances separate is very important as a business owner. While it’s essential to have a business checking account, it actually may be wiser to split up parts of your business’s finances into more than one account. Using a single business account for banking transactions may have worked fine for you, but the more your business grows, there may be benefits to separating funds into multiple accounts. To meet your financial needs and goals, you can open multiple business bank accounts with ZilBanking and organize your finances on a single platform.
As per the recent reports from TD Bank, roughly 27% of small business owners use the same checking account for their personal and business financial transactions. The thing is, there are many checking account options available for small businesses out there, but it can be hard to find the one that meets the needs of your business. Besides, each small business is unique as it comes, and so to find one that fits the mold of your business can be pretty tricky. Therefore, it may make sense to open multiple checking accounts for your business with the right online banking partner to help elevate your business banking experience.
Reasons to Have Multiple Business Accounts
Helps You Stay Organized
Who doesn’t love to stay organized? If you mix personal and business transactions into one account, you might face difficulty determining the expense, revenue, and profit margin. Moreover, different bank accounts can serve different business needs. For example, you may designate one account for routine cash expenses, one to pay taxes, and another for emergency requirements. That is, keeping separate accounts for each of these functions can give you a clear picture of where your finances stand and let you know the vulnerable areas in your business structure. And, don’t forget that being organized will have a good impact during tax time and can benefit you when you approach your bank for additional financing.
Security is often the first thing business owners think about when it comes to bank accounts, and rightfully so. Today, security is more important than ever, and security is something small businesses can’t avoid. Spreading your money across multiple accounts will give you an additional layer of protection against scams and other cybersecurity attacks. After all, you can never be too cautious regarding financial security. So, be sure to choose a military-grade secure platform like ZilBanking and protect your money with advanced positive pay features.
In the unlikely event that one of your business accounts is compromised, the fallout will not be as damaging if you keep your business’s funds in more than one location. This way, you can lessen the chance that an outsider gains access to your funds.
Ability to Track Records & Transactions
Tracking your financial transaction and cash flow can be a bit tedious, but a robust platform like ZilBanking can ensure things don’t slip through the cracks. Typically, if your emergency fund and your office expenses are kept in the same account, it can be tempting to use them for other needs that may emerge. So, using a single business account can make it harder to achieve individual financial goals. Instead, if you open separate accounts — one for each purpose — you can easily track your progress toward a goal and see how much fund you have with you for each need.
Simplifies Your Tax Returns
Having a business bank account helps separate your personal and business expenses. In addition, separating your business funds into multiple accounts can make for cleaner accounting. Moreover, a business checking account helps to ensure you file taxes accurately. It also enables you to take advantage of business tax deductions, and if the IRS needs to investigate your business finances, your earnings will not be at risk. Filing taxes becomes more challenging when you mix personal expenses in your business account. This could lead to facing IRS penalties. Furthermore, designating an account for taxes could allow you to effectively budget for known expenses throughout the year.
Whether you are a startup or an established business, it’s important to look professional. In return, it will instill more confidence in your clients and brings more business to your company. Having multiple business bank accounts for your small business will help you stay organized, secure and improve your bookkeeping. Whether you’re opening your first business bank account or considering opening a third one, creating an account is easy with the help of ZilBanking. From saving you time and effort to helping you manage your finances better, there are many advantages to having multiple bank accounts.