You may have chosen to venture out and start your own business. Although you may have just a few employees, an important decision you should make is the method by which you pay everyone. It should not be cash. Instead, it should be by check. You may already have a personal checking account and presently use that account. However, it places you at a disadvantage, especially, since it will also include your employees. You should, instead, create a separate account and use business checks. This will be more beneficial to you in the long run.
It Keeps Your Business Records Organized
In order to have a successful business, it is essential that you manage your business expenses and keep track of cash flow. Business checks keep your accounting records more organized. Any business transactions can be easily tracked. It is also more helpful in monitoring profits gained through your business.
By mixing personal and business transactions, it would make it more difficult to determine profit margin. However, with a business account, it makes it easier to filter out check payments, when reviewing bank statements. This makes it simple to calculate business expenses as well as determine company profits.
It Helps You Gain Bank Relationships
By having a business checking account, bank relationships can be developed. This can, ultimately, grow your business. It will make it easier to get approved for business loans with better loan terms. Also, it is proof that you are serious about doing business.
Many banks not only look at the business’s income, they also want to see you have your own checking account. With a business account, you can show that your business has a stable income and a great credit score. This is why you should never mix business with personal funds. For example, if you have a poor credit score, you could put your business financial future at risk. This is because banks will not approve you for a loan with a bad credit score.
It Makes You Look Professional
Since you are a business owner, you should look like a professional. You shouldn’t send a personal check to your employees, customers, or clients. It wouldn’t look professional at all. Instead, you should open a business checking account, so that you gain respect from others. A business checking account allows you to order checks with the business name on them. This proves to everyone that you, in fact, own your own business. It will also make customers or clients feel more comfortable doing business with you. They will feel your business is legitimate and can be trusted.
You Will Be Able To Accept Credit Cards
Customers or clients may not want to always use cash. By having a business checking account, you will be able to also accept credit card payments. This will help your business stay afloat and be more successful. However, a personal checking account will not allow you to accept credit card payments, which will be detrimental to your business.
You may have an online store and process your payments using services, such as Square. However, you need a business account to send the payments to. A business account will make it simple to track payments and provide refunds.
Some Clients Prefer Checks
Some people are not too comfortable with online banking or mobile banking. A business checking account is, therefore, helpful, when doing business with them. You will be able to quickly pay for goods or services provided by the clients. You can settle your dues, by simply writing a check.