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In this video, Entrepreneur Network partner Mark J. Kohler explains the importance of opening a business account rather than conjoining your personal and business finances.
When you’re first starting up, you should immediately set up a checking account for your business, Kohler advises. By doing so, you’re protecting yourself and your business. A separate business account will provide asset protection as well as corporate veil protection, as long as you’re paying your business expenses from your business account and your personal ones from your personal account.
Keeping these two accounts separate will also protect you from any run-ins with the IRS. When your books are a mess, you lose out on write-offs and the IRS can go after you, Kohler warns.
Lastly: open a business account simply for better management and your own sanity. It makes life easier and more organized, so at the end of the year you’re not going to go crazy having to separate everything.
To learn more about opening up a business account, click play.
Watch more informative videos from Kohler on his YouTube channel.
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