Your Limited Liability Company (LLC) can theoretically be managed with only a personal bank account. However, running your business this way is highly unadvised. Opening a separate business checking account is a necessary step to take in establishing your LLC.
A business bank account comes with several benefits which can aid in maximizing the potential of your business. Here are 5 reasons why we believe opening a business checking account is the right move for your LLC:
1. Helps to protect your limited liability
Limited liability protection is one of the benefits of forming an LLC because it helps keep your personal finances safe while running your business. However, by combining your personal transactions and your business transactions, you can put that protection at risk.
Having a separate account for your business funds creates a clear divide between your own money and your LLC’s. With this kind of division, you can prevent any sort of mix-up from occurring an enjoy peace of mind knowing that your personal finances are protected from any of the risks of running a business.
2. Allows you to accept different forms of payment
The modern customer will rarely make purchases using cash.. To maximize your sales, you will likely need an account that can accept a variety of payment options. This includes debit card purchases, electronic transfers, and ACH transactions.
Grasshopper’s Innovator Business Checking allows you to easily receive payments via wire or ACH without having to worry about unnecessary transaction fees. With Innovator Checking, you also have the ability to send personalized invoices directly to your customers inbox, which allows you to get paid faster. Personal bank accounts do not have the provisions to receive these kinds of payments. If you want to maximize your profits, it is vital for any small business or LLC to use a banking service with these features.
3. Makes bookkeeping easier
Bookkeeping is an essential process to running a business. However, it can also be a difficult process if you don’t have your finances well organized. Having your LLC’s finances in their own account makes it easier to know which numbers are relevant when calculating what you’ve earned, what you’ve spent, and what’s tax-deductible. This saves you or your bookkeeper time in the bookkeeping process.
Some business accounts may even include digital bookkeeping tools to make the process of bookkeeping even easier. For example, each Innovator Business Checking account comes with a free Autobooks membership built into the Grasshopper mobile app and online banking. Autobooks offers automated bookkeeping to help business owners generate reports and reconcile transactions. Having this kind of automation in your bookkeeping can save you time, giving you more time to focus on other aspects of your LLC.
4. Makes tax season easier
Tax season can be an intimidating time for small business owners. The first step to making tax season easier for your LLC is by having a business checking account. Having a separate account for your LLC makes your taxes easier to navigate by having all of your relevant transactions in one place.
Having an LLC checking account can also make it easier to determine which of your business expenses are tax-deductible. This can help you to potentially lower your overall tax bill.
5. Provides professionalism & credibility
Establishing your LLC as a professional and credible business is a great way to influence sales. Having a dedicated business checking account is the first step to creating a professional identity. When you have a business account, your LLC business name will be what appears on payments.
Small details like this can help you to appear more professional to vendors or suppliers. It also helps you to appear more credible to potential customers, which can influence their spending decisions. Overall, creating a better image for your LLC can help lead to better business.
Bottom Line
Having a business checking account will make it easier to manage your LLC. From making sales to filing taxes, every financial aspect of your business becomes simplified when you have a secure bank account to back it up. That’s why here at Grasshopper we pride ourselves with offering the best possible banking service for LLC owners.
By Michaela Lenahan in Business Banking
