Small Business Banking: Why You Should Consider Business Bank Accounts

Small businesses are an increasingly important part of the American economy.

Sponsored by What's this?
man looking at bank account on computer

Small businesses are an increasingly important part of the American economy. According to the Bureau of Labor Statistics, they account for more than 65% of the new jobs created since 2000—and more small businesses are launching every day.

If you’re a small business owner looking for ways to grow and sustain your organization, opening business bank accounts can make a big difference. From simplified cash flow to access to funds, dedicated accounts can help you make effective use of your money. 

Below, we break down some of the key reasons why separating your personal finances from your business finances can help you take your business to the next level.

Separate Accounts Can Help You Streamline Your Finances

One of the main benefits of keeping your finances separate is the ease of managing your money. With separate accounts, you can keep track of monthly revenue and expenses, and you’ll have the information you need to properly file your taxes.

What’s more, having dedicated accounts is the best way to limit personal liability when it comes to your business. You’ll be able to have a clear sense of your personal spending, while also having a firm grasp on the money flowing in and out of your business without trying to sort between personal and business spending. You’ll also have easy access to the information you’ll need to file both your personal and business tax returns so that you can demonstrate profit and take advantage of available deductions. 

As a separate entity, your business is also subject to different regulations. Having the paperwork to prove that it is a viable business can eliminate any issues and prevent a potential audit.

Establishing a Track Record Simplifies the Process of Applying for Credit

Another benefit of separate accounts is the documentation they provide for your business. This can help to establish a business credit score and enable you to apply for credit if you want to do so. Unlike a personal credit score, your business credit score is based on the credit established by your company and is based on a different scale. 

A business credit score is helpful on several other levels. It allows vendors and other partners to establish the creditworthiness of your business and makes it easier to access financing when you need it.

Business Bank Accounts Have Their Own Unique Benefits

It’s also worth noting that business bank accounts have some unique features that could help your business save and spend more wisely. This is especially true with Square’s checking and savings accounts, both of which can help you do more with your money without fees or account minimums.

With instant access to sales, Square Checking makes it easy to withdraw funds when you need them and access cash flow at your fingertips. If you want to boost your savings, Square Savings helps you set money aside by automatically transferring a percentage of each sale into your savings account. You’ll be able to earn 0.5% APY (which is currently 8x the national average) and save for multiple goals at once.

Running a successful business can be complicated but having the right resources at your disposal can make a big difference. By separating your finances and choosing bank accounts that can help you make the most of your money, you can keep track of your finances and run your business more efficiently.