When you own a small business, the likelihood to be tempted to commingle your business and personal finances is very high. However, mixing your business and personal finances is risky, owing to unwanted consequences, such as lack of operating capital because you spent business funds on a personal matter. This is not the only reason why you should separate business and personal accounts. Other reasons include:
- Business identity and credibility – Paying your clients from your personal account is not as credible as paying them from a business account. For example, most people are wary of personal cheques as opposed to business cheques. Trusting a personal cheque is not easy, unless you have established a personal relationship with your customers and they believe that your cheques will never bounce. Otherwise they will ask for cash instead. Making payments from a business account gives your business more credibility in the eyes of your customers by showing that you maintain a separate business checking account and ensure that only business expenses are paid from it.
- Record keeping – It will be hard to keep accurate business records when you are also withdrawing finances for personal expenses from the same accounts. It is, therefore, important that you keep separate accounts for business and personal expenses.
- Business credit – How will you convince a bank to give you a loan for your business when you haven’t established any business credit?
We’ve briefly given you four reasons to keep your business and personal accounts separate. Now you’re probably wondering which account will best suit your business needs. Don’t worry. We’ve got you!
At Credit Bank, we offer the following business accounts:
- SME One Tariff Account for the business entrepreneurs and small/ medium sized businesses that would like to an account with a flat monthly fee.
- Business Current Account for the business that would like to be in control of the account as it allows for you to pay for your services as you transact on the account.
- Fixed/Call Deposits for those that would like to invest excess funds for a higher return.
You can open your account online. For more information on how to open a business account at Credit Bank, get in touch with us.