Needs of Having a separate business Account for a company

[Augusta]

There's always the need of keeping separate personal and business funds in separate bank accounts. The truth is that business and personal finances should be kept separately to avoid facing future challenges.

So what are the needs of having separate bank accounts for your business from your personal account.

Ease of monitoring cash flow

With having a separate bank account for your business you can see how the money is coming and how the business is expending it clearly.

Clear records for auditors and other authorities

For those that would want to work on the financial books of the company like Auditors, accountant it easy to navigate during any internal auditing.

Management of external transactions
With a business account you would able to manage all other external inflows and outflows of the business. Even the bank can provide a business credit card that can be used to manage the cash flow while running your business than using one's personal card.

 

[Yugocean]

Are you trying for a startup? it seems you are planning, and sharing the ways you have draft plan. Good draft, but have to be amended as per other requirements. Like some refreshments (include the cost) for those authorities who will come to inspect.your records (😂).

A company always have separate accounts for different requirements, also one cannot take risk of putting all things in one basket.

There is also a need of emergency Fund, in case of any problem, that fund will be used in different cases. I will even advice to keep salary account separate too, that will be used to pay salaries to the employees.

 

[Etini]

It is important to open a separate bank account for your business. The account must be a corporate account. I won't ever take your business seriously if you ask me to make a payment into a personal account. It helps to give your business an identity and it inspires confidence in me when I am dealing with you.

With a corporate account for your business, you can easily access financial services such as loans and overdrafts. So many people have failed to disentangle their businesses from themselves. One way to effectively start this distinction is to operate a separate bank account for your business.

If possible, that account should not be administered by you. With this setup, you can easily attract investors because they would find it safe to put in funds into the business. This is what is obtainable in modern organizations. The benefits of a business account can't be overemphasized.

 

[Carpon]

It will never be a wise decision to treat your personal life and business life as one financially. And having a single account for the both is very detrimental to one's finances personally and business wise.

First among the many demerits which this has is that you won't be able to have full control over each independent unit of your life. Your personal funds will mix up with business funds and you may at times dive into the other and that will really cause some anomaly in the stability of your finances. First thing I think you need separate accounts so as to avoid improper management of funds.

Moreso, having separate accounts helps you to keep track of everything perfectly. You may get confused in the statistics when the accounts are merged. But once you have the two separated, then that will make it easier for you to streamline your scope and keep a close eye on each aspect of your life.

 

[symakhan]

There's always the need of keeping separate personal and business funds in separate bank accounts. The truth is that business and personal finances should be kept separately to avoid facing future challenges.

So what are the needs of having separate bank accounts for your business from your personal account.

Ease of monitoring cash flow

With having a separate bank account for your business you can see how the money is coming and how the business is expending it clearly.

Clear records for auditors and other authorities

For those that would want to work on the financial books of the company like Auditors, accountant it easy to navigate during any internal auditing.

Management of external transactions
With a business account you would able to manage all other external inflows and outflows of the business. Even the bank can provide a business credit card that can be used to manage the cash flow while running your business than using one's personal card.

Yes, as the business transactions are large, and sometimes profit and loss may suffer your personal savings. It's better to keep your business account separate. Also in some cases business registration requires separate bank accounts.

 

[saoussen5765]

It will never be a wise decision to treat your personal life and business life as one financially. And having a single account for the both is very detrimental to one's finances personally and business wise.

First among the many demerits which this has is that you won't be able to have full control over each independent unit of your life. Your personal funds will mix up with business funds and you may at times dive into the other and that will really cause some anomaly in the stability of your finances. First thing I think you need separate accounts so as to avoid improper management of funds.

Moreso, having separate accounts helps you to keep track of everything perfectly. You may get confused in the statistics when the accounts are merged. But once you have the two separated, then that will make it easier for you to streamline your scope and keep a close eye on each aspect of your life.

The law sometimes obliges you to have more than a bank account for a company, like for example for sale of some elements paying to bank account A and others for bank account B as the taxation on food elements isn't same for cosmetic elements, this is all about laws and their determination for taxation.