A business without proper money management is like a body with bad veins: Without that precious lifeblood circulating through it, it won’t last very long. Having the right business bank accounts setup will go a long way towards keeping your business on track for success. Notice that we said accounts: For your business to grow and stay strong, having one bank account just won’t cut it. You’ll need a couple more on hand to keep that money flowing the right way.
At Hacker Accounting we know what business owners need to do in order to help themselves succeed. Here are the three business bank accounts that every owner should have.
First of all this is your basic business account that all owners should have. It’s a checking account that takes in and handles all your income and expenses. It covers all your operating costs. This is the account you’ll use most often.
Additionally every business owner should have a savings account! Have a separate account that you keep to save up money for your taxes. One major benefit of having a tax account is that you can use it to pay off your payroll taxes. You can set up automatic payments from this account to make sure that you stay on top of paying off these taxes. Staying up to date on your payroll taxes is crucial: It’s one of the red flags that the I.R.S. looks out for!
If you do freelance work, are a sole proprietor or in a partnership, having a tax account is essential. You can use the tax account to settle up on your quarterly taxes. Since these payments come up more often than normal tax transactions, having funds earmarked just to handle these payments can be a real financial lifesaver.
Having a savings account for taxes is great for managing your business’s present, but you also want to be putting away money for your future. You’ll need some rainy day funds on hand in case you need to deal with an emergency or you want to invest in something that will help you grow your business. It can be hard to have the cash on hand to handle these large transactions just from your monthly profits, so it’s important to spend time saving up these funds in a reserves account for when you need them. You can start small: Put aside 5-10% of your revenue into your account and let it build up. The best accounts for your reserves tend to be ones that can earn interest or dividends. It’s the best of both worlds: Having more money by making your money work for you.
For more information on business bank accounts, give Hacker Accounting a call at 602-375-5251.