It is very important to have separate account for business and
personal needs. In case if you run a small business all by yourself you
should maintain separate accounting system for dealing with your
business needs and personal things. Proprietors of small business always
run out of time and they don’t have time to sort out things leisurely.
It is easy for you if you have two bank accounts separately as business
accounting and personal accounts. By maintaining two accounts you can
easily manage finances and keep records of the business. It is possible
to monitor the funds by going through the statement which clearly tells
you how many checks were issued this week and what are the amounts
credited. You can view almost each transaction of finance in your bank
account. It also helps you to plan your budget and allot funds for
future investment.
Business checking account is one in which all
the transaction of checks are made. You issue checks to various agents
and third parties and suppliers for smooth running of your business. You
have to issue checks from the business checking account towards payment
of raw material and goods necessary for running your business. It is
possible to withdraw cash at any ATM service point and you can also
deposit funds at any branches now.
Now banking is made easier by
electronic money transfer and safe internet banking. Moreover, you can
make various financial transactions using your checking account. Some
banks do not impose restriction on the number of checks to be issued
each month while some other banks fix a limit for issuing checks. Again
there are differences between banks which ask you to maintain minimum
account balance. You need to have a proof of your business and personal
identification for opening a checking account.
The savings
account of your business is the place where all the funds are deposited.
Your business will gain constant rate of interest deepening on the
amount deposited in the account. Usually savings accounts are not
connected with debit cards and also check books. You can either take the
money through ATM credit card or visit the nearest branch personally
for making transaction.
You can comfortably deposit all the
profits the business makes in the savings account. All the affairs of
the company and payment for employees are done only by checking account.
In some companies employees use the credit card for proceeding on
official tours. Business accounting is very much essential for managing
the financial transaction of the company effectively.
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