As a business owner, it’s important to keep your personal and business banking transactions separate. There are numerous reasons why business owners should open a business bank account:
Accounting & Bookkeeping
Your monthly bookkeeping will be easier to manage as you will only need to reconcile your business accounts. It also ensures that financial statements are accurate as it has only accounted for business transactions.
Save you and your bookkeeper time as you won’t have to sort out which are personal vs business transactions.
Preparing tax returns will be easier as personal and business transactions are kept separate. It will also not raise any red flags with the CRA as they see separate bank accounts have been kept.
By opening a business account, it will be easier to generate a credit score for your business.This will be important when you apply for a business loan.
Should your business be subjected to a lawsuit, having separate accounts means your personal finances would most likely be protected by the courts.
You would never give your personal debit or credit card to anyone, but a business account would provide you flexibility to have staff make purchases on behalf of the business.
Opening a business account will take some additional steps. Depending on your legal structure, your financial institution will require further documentation in order to open a business account. These documents may include a business license, registered trade name, legal paperwork for partnership, articles of incorporation, and/or business number. It’s best to check with your financial institution to find out what documentation they require.
We can help manage your bookkeeping so that you can spend more time with your business.