One of the most important things you can do for your business is to keep your business and personal accounts separate. This may seem like a no-brainer, but many small business owners make the mistake of commingling their funds.
Not only does this make it difficult to track your expenses and income, but it can also lead to problems come tax time. So be sure to open a separate bank account for your business and use it exclusively for business transactions.
Why it’s important to have a separate business and personal account
There are a few key reasons why it’s important to keep your business and personal accounts separate:
- It helps you track your expenses and income more accurately. When all of your business transactions are in one place, it’s much easier to see how much money is coming in and where it’s going out. This can be helpful come tax time or if you ever need to apply for a business loan.
- It can save you money on taxes. If you have a separate business account, you can deduct certain expenses come tax time. This can include things like office supplies, marketing expenses, and even mileage if you use your car for business purposes.
- It makes your business look more professional. If you’re ever dealing with investors or lenders, having separate business and personal accounts can make your business look more reputable and organized.
- It can help you avoid personal liability. If your business is ever sued, your personal assets (like your home or savings account) could be at risk if you don’t have separate business and personal accounts. Having separate accounts can help protect your personal assets in the event that your business is sued.
How to set up a separate business bank account
If you don’t already have a separate business bank account, setting one up is relatively easy. Most banks will require you to fill out a short application and provide some documentation, like your business license or Articles of Incorporation. Once you have your account set up, be sure to use it exclusively for business transactions.
There are a few key things to keep in mind when setting up a new business bank account: Be sure to shop around and compare different banks. Look for an account that has low fees and offers the features and services that you need. Consider opening a business credit card in addition to a business bank account. This can help you keep track of business expenses and build up your business credit score. Make sure you have all the required documentation. Most banks will require you to provide a copy of your business license or Articles of Incorporation.
how to switch back to a personal account on instagram
If you have a business account on Instagram, you can switch back to a personal account at any time. To do this, go to your profile settings and tap the “Switch back to personal account” option.
Keep in mind that switching back to a personal account will mean that you’ll no longer have access to business features like insights and promoted posts. You’ll also lose any followers who were following your business account. So if you’re thinking about switching back to a personal account, be sure to weigh the pros and cons first.
What to do if you accidentally mix up your accounts
If you accidentally use your personal account for business purposes, or vice versa, don’t panic. The best thing to do is to try and fix the mistake as soon as possible. If you made a business purchase on your personal account, you can transfer the funds to your business account. Or if you used your business account for a personal purchase, you can either reimburse yourself from your business account or pay the money back with your personal funds.
The important thing is to not make a habit of commingling your funds. Doing so can lead to serious problems down the road. So be sure to keep your business and personal accounts separate to avoid any unwanted headaches.