2018-06-02 02:40:23Finance and AccountingEnglishLearn how keeping separate business and personal bank accounts helps keep your bookkeeping process simple. When you keep your money...https://quickbooks.intuit.com/in/resources/in_qrc/uploads/2017/05/bank-account1.jpgBusiness Bank AccountSmall Business Tip: Open Separate Business Bank Accounts

Small Business Tip: Open Separate Business Bank Accounts

1 min read

When you own a small business, it’s helpful to keep separate bank accounts. You don’t want to mix your personal and business banking information because it makes it difficult to keep proper track of your business income and expenses.

A bank account that’s strictly devoted to your business helps ensure that all of the expenses deducted from the account are business-related. This makes it a lot easier to determine whether a specific expense qualifies for a tax write off. For example, if you take a business trip and decide to extend the trip a few days to explore the area, part of your trip would be business and part of it would be considered personal. If you only used one bank account for your expenses during the trip, it makes it a lot harder to determine which expenses are business-related. But using a business and a personal account helps keep your finances separate, which in turn, simplifies your bookkeeping process later.

When tracking your finances, you should use your business account for all income coming into your business and expenses going out. Then, when it comes time to pay yourself, the money you earn should go into your personal bank account. And that’s the account you should use to pay your personal bills and expenses. It’s also a good idea to keep track of your income and expenses using cloud-hosted accounting software, such as QuickBooks Online. Cloud-hosted software typically connects directly to your business bank account, allowing you to view your business finances in real time.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

Related Articles

5 ways to fund your small business and how they fit into your P&L

Small business accounting also includes factoring in sources of funds to your…

Read more

Freelancer to Small Business: From working independently to being your own boss

India has over 15 million freelancers that are part of the 40…

Read more

QuickBooks Online Release Notes: November 2016

In November 2016 QuickBooks release notes we have new features including a low…

Read more