When and Why to Open a Business Checking Account 

Have a business and wondering if you need a separate business checking account? You’re not alone. When you’re juggling multiple income streams, or launching a traditional brick-and-mortar store, many business owners question if it’s necessary to have a dedicated business account and, if so, when should one be opened.

Why Now is the Perfect Time

Opening a business checking account right from the start provides added protection and flexibility, helping you run and grow your business on your terms. As soon as you start earning or spending money, having a separate account ensures your personal and business finances stay separate. This separation makes tracking business expenses and profits much easier. This applies to all types of businesses, even sole proprietorships and freelancers.

If you’ve already been using a personal account for your business, now is the time to make the switch to a business checking account. The sooner you make the switch, the better for your business’s financial health and professional image.

Benefits of Business Checking Accounts

• Protection. One of the biggest perks of having a business checking account is the protection it offers. If your business ever gets sued, mingling business expenses with personal funds can put your personal finances at risk.
  
• Professionalism and credibility. Your image matters. Using your personal account to write business checks can damage your reputation. Having a separate business checking account shows others that you’re committed to its success. Additionally, it makes it easier to receive client payments, settle outstanding invoices, and manage business expenses.
  
• Simplify your taxes. The IRS recommends all business owners have a separate business checking account to make it easier to track business expenses. It can even potentially lower tax liability, by allowing you or your accountant to identify expenses that are tax-deductible before submitting your tax bill. For businesses set up as a corporation, limited liability company (LLC), or limited liability partnership (LLP), the IRS actually requires a separate business account.
  
• Increase your purchasing power. A business checking account may enhance your purchasing power. Use it to pay for business expenses like supplies, equipment, and rent. You can also access credit cards and loans designed specifically for business owners, which can help you grow your business.
  
• Prepare for future growth. Having a dedicated account for your business sets you up for growth and not only makes it easier to track your finances, but also apply for business loans and credit cards.
  
• Access to other business services. Once you have a business checking account, it opens the door to valuable treasury management services like payment and collection services, fraud protection through Positive Pay, and funds management tools.

What should I look for in a business checking account?

When it comes to business checking accounts, you want to find one that protects your business and personal assets while allowing you to enjoy the flexibility and convenience you need to grow. Here are a few things to look for in a business checking account:

• Little to no fees. Look for an account with no hidden fees and no monthly service fees.
  
• No minimum balance requirements. Find an account that doesn’t require a minimum balance.
  
• Easy payments. Choose an account that makes it easy to pay vendors and bills by ACH, wire, or check. Another huge plus is the ability to schedule one-time or recurring payments.
  
• Mobile-friendliness. Look for a business account that allows you to manage your account(s) right from the palm of your hand 24/7.
  
• Earning capacity. Look for an account that offers higher earning rates or the ability to earn cash back.
  
• Dedicated support. Seek out a bank or credit union that offers dedicated, local support. Whether it’s someone at your local branch or a dedicated call center, having real, live support makes a huge difference.

Luckily for you, Arkansas Federal Credit Union business checking accounts check all these boxes! Whether you want to earn a great rate on your balance or get cash back, Arkansas Federal has an account that’s perfect for your business. It’s truly a win-win.

Find the best option for your business today and get started on the path to great business banking.