Organizing Business Finances

Sometimes, small business owners and freelancers start out without having separate business and personal accounts, or choose not to. However, it is beneficial to have separate accounts for business and personal, and we’ll explain why.

Are you a small business owner? Are you a freelancer? Do you have a separate business checking account MA for your business transactions? Or are you doing your "small-time" transactions from your personal checking account itself?

Some small business owners and freelancers merge their personal and business transactions; ruling out the need for a separate business checking account, MA for their minimum transactions.

However, they fail to realize the many benefits of a separate business account.

Banking Benefits

Here are the various benefits of separating the business account and personal checking account.

• It is easier to create a wall between business and personal accounts, rather than break up the various bills, income and expenses for taxation purposes. It is not only painful, but often depicts an incorrect picture.
• Business checking accounts ease the process of making business payments. You can use checks, or bank to bank transfer for all business payments and receipts. Regular payments and withdrawals are made easier with a business checking account.
• Separate personal and business checking accounts make savings easier. You can allocate a certain amount of money to be transferred to your personal account for savings every month. This amount is directly transferred by the bank. You can therefore, budget for this transfer every month. The benefit of such a transfer is that it motivates you to earn more than the fixed transferrable amount; as the transfer amount does not vary. Conversely, when the personal and business account is merged, the balance is often used up completely, as you fail to demarcate among business and personal income.
• A separate business checking account helps you to build a credit rating for the business, which is different from the personal credit rating of the owner. For, a good credit rating helps you to acquire loans and credit facilities for the business in the long run. For every business concern requires funds to grow and expand, sooner or later.
• Issuing a check from a personal checking account is certainly not as professional as issuing the same from a business account. You add the professional touch to your business with an account in the business’ name, rather than your name. Moreover, even clients view you as a professional concern.
• Yes, you may be a small business concern or a free lancer now. However, you certainly have the wish and will to grow. A separate business account proves handy on your road to growth.

Often, small business owners and free lancers do not want to burden themselves with additional expenses, especially at the onset. Therefore, they often make the mistake of pooling their personal and business funds. However, it is important for them to understand that the route to growth begins at the "starting" point and it is therefore advisable to have a separate business checking account, from the beginning itself.

There are many MA banks with free checking accounts, but at Dedham Savings you can get the one of the best free checking accounts around. Our account comes with free telephone banking, mobile banking etc.