Many small business owners avoid or don’t pay too much attention when considering whether to start up a bank account in their business name. They make the mistake of using their private account to perform their business transactions, so they could save a little bit of money necessary to open a new business bank accounts.
The Importance of Having a Business Bank Account For Your New Business
With an account in your company name has many benefits. For instance, it gives your company a more professional appearance when dealing with your customers or customers. Using your own personal account for business purposes gives the impression you aren’t really serious regarding your company and it’s more like a hobby.
Having another business account turns out to be beneficial once you will need to finish the accounts for the company and any associated tax returns. Indeed, it is possible to quickly check the expenses and income for the year, instead of having the hassle of dividing your personal and business transactions if you simply have a personal account.
Another great reason to have a business bank account is to demonstrate the tax authorities your business is transparent concerning the monetary transactions it carries out. All of the income and expenses must be accounted for through the company account. Thus, if HM Customs & Revenue want to appear over your records, this will demonstrate that you’re declaring all of your earnings and only claiming expenses associated with business.
Opening a business account with a bank also has other added perks. By way of instance, you can usually obtain free banking for at least a year as a new organization. Also, some banks even offer you new customers special deals on accounting applications to use in their companies. Finally, as regards this point, it could be easier for you to receive a business overdraft or loan for those who have a business bank account.
Some entrepreneurs are set away from opening a business bank accounts because they believe it’ll be complicated concerning the formalities and legalities. This is a misconception because it’s extremely simple to open a bank account the majority of the time.
A Couple of points that one needs to Remember when opening a company accounts are:
- The account maintenance fee
- Different trade modes available e.g. online banking, debit card etc.
- Overseas transaction charges
- Interest rate charges
- Minimal balance that you need to Keep
A company bank account may initially appear to be an excess overhead on your organization, but the total paid will be worth concerning the time and money you’ll save by not having to separate out your company transactions from your individual transactions. Having a business bank accounts also sends a clear message to other companies you deal with and the tax authorities that you are a suitable company with nothing to hide.