Home Businesses Need a Home Business Account
Where does the money earned by your home business go? Many work at home moms find that they started out slow, so the money just went into the regular, family account. Then, when the business grew, they just left it at that. However, having a separate business account is a good idea for several reasons.
Less Tempting. When you have the money in your personal account, it´s very easy to say, “Oh, I need a hundred bucks for groceries, I´ll take it from the business amount and put it back later.” Later often doesn´t come and eventually, you lose track of exactly how much is owed to your home business.
Easier to Track. While it is possible to keep excellent records and track your business money within a personal account, it just isn´t that practical. Having a separate home business bank account is easier to keep an eye on.
More Professional. To present a more professional front, it´s far better to have checks that say “Linden Flowers” than “Marie Somebody”. The same goes for when you accept direct payments, a business account will offer more credibility.
Safer. There are always unexpected expenses that pop up and if you are mixing your home business money with your personal cash, you may not leave enough for emergencies, causing bigger problems down the road. If your home business has a separate account that you won´t be touching, that money will be there for those unexpected payments.
There are plenty of reasons to set up a home business bank account. If you plan to be serious about this, then go to the bank and start one now, even if you aren´t really earning much yet.
Did you enjoy this article? Don´t miss a single day of work at home tips! Subscribe now to get daily updates.
Genesis,
When we set up our banking, the manager recommended that we set up three different accounts. We have one that is just for online transactions, and we transfer money out of it regularly in case someone online were to get our account information. We have another for business use, such as paychecks, buying supplies, etc. The last one is simply a home for tax money. Every check that we get is split up, with a portion getting saved for taxes. This way we won’t have to scramble to find money when it’s time to pay up. We are really, really proud of ourselves for maintaining this third account, and I defintely encourage other freelancers to set one up. It’s sort of like an escrow account when you buy a house.
The third account for taxes is a great idea! Thanks for sharing that tidbit.
Lorna, that is a very good idea! When I worked as a first aid attendant on a construction site, they didn´t take our taxes off our checks and it came as a bit of a surprise at the end of the year that I had to empty out my savings to pay taxes!