Opening a business account can help small business owners manage their finances, track expenses, and accept payments from customers.
While you may use a personal account to get your idea off the ground, it's important to know when to open a business account and how to use it.
Here, we'll explain what a business account is, the benefits of opening one, and different types of business accounts to choose from.
A business account is a bank or credit account dedicated solely to your business finances. While you may use a personal account to pay your mortgage or budget for groceries, you can use a business account for business-specific tasks like processing customer transactions and sending invoices to vendors.
It's also important to separate your business finances from your personal finances for tax purposes. With a separate business account, you can more easily track expenses and manage your business assets. You can also build business credit for future loans.
While corporations and LLCs are mandated to open a business account, it can be tough for small businesses and entrepreneurs to know when the time is right to separate their finances. Once you start earning or spending funds specifically for your business, you should have a business account to process and manage those funds.
Remember that you must meet certain business account requirements to apply, such as your:
Tip: Visit the Small Business Administration to get your federal and state tax ID number and apply for business licenses and permits.
Separating business and personal finances can help streamline your bookkeeping and give you peace of mind.
Here are six ways to separate your personal and business finances:
Business accounts can come with many helpful tools and perks for growing your business. The biggest benefits of a business account include:
Common business account types include:
Figuring out how to choose a business account can be tough. You'll want to find the right account type for your financial needs.
Consider these factors:
Opening up a dedicated account can help take your business to the next level. Just be sure to research your options, so you can find the best solution for your immediate and long-term business goals.
Small business owners and entrepreneurs can open a business account to access a range of tools to help grow their businesses.
Use PayPal Checkout to easily accept payments online or in-store. Link your account to ecommerce platforms like Shopify, BigCommerce, and GoDaddy to drive revenue right from your site. Send customized invoices to get paid quickly and securely. And let shoppers pay the way they want to.
Ready to get started? Learn how to set up a PayPal business account.
In partnership with three expert business owners, the PayPal Bootcamp includes practical checklists and a short video loaded with tips to help take your business to the next level.
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