Why Every Foodpreneur Needs a Business Bank Account
If you’re just starting out, or you’re extra-small, you might be using your personal bank account for business transactions. It may seem like a big chore to research banking options and move money around. But this is one chore that you can’t skip as a food entrepreneur. Opening a business bank account makes accounting easier, adds professionalism to your business, and saves you from a nightmare come tax time. Here’s everything you need to know about business banking as a foodpreneur.
Why you need one
If your personal money and business money are housed in the same checking account, you’re a walking liability. Your personal assets could be at risk if legal action is taken against your business. Your daily accounting will be more complicated. And finally, you’ll need to parse through hundreds of transactions at tax time to separate your two activities. Make the effort now, and you’ll thank yourself later!
How to get one
Luckily, many banks offer business checking accounts and the process is fairly painless. While it may seem simplest to open a business account at your personal bank, they may not be right for your business needs. You’ll need to conduct research about which type of account is right for you. Ask yourself the important questions! Do you anticipate handling lots of cash? Some banks limit your cash deposits. How many transactions do you think you’ll average? Some banks limit those, too. Do you need widely available ATMs with a national bank, or would you rather work with a local credit union for the customer service benefits?
How to use one
Once you’ve got the bank account, make use of it! Order printed checks, and find out whether your bank has electronic checks that can be printed by your accounting software. Familiarize yourself with your bank’s rules, and make sure that you’re always making the minimum balance and staying under any limits that might be imposed on your business bank account. Connect your account to any banking apps and software that you use (more on that soon!), and you’re on your way!
It may take time and effort to set up business banking, but you’ll be so glad you did.