Why would I want to open a business bank account, which mostly seems to cost money, instead of just opening a new personal bank account that I use for my business? What's the difference?

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Layah Barry
http//www.virtual-online-assistants.com

I've been looking into the same thing just today and I'm not liking the fees for business bank accounts

The client I already have is just paying into my private account (we have a very informal arrangement and don't have a contract or anything), but I'm thinking that that it will appear more professional to have a business account for new clients as I find them.

Another thing, my husband and I have started the business as a partnership, except he hasn't left his FT employment yet. Again, the clients he will have will most likely expect to be paying invoices to a business bank account, rather than his personal one.

I have a business account as I had a client who insisted on paying by check and would only address it in the name of the business.

There are many banks that offer accounts to small businesses with no fees. My bank allows a set number of transactions per month which is very generous in the allotment. If you are a dba your account will be set up in your name with your business name. Some banks will not allow you to deposit "business" checks into personal accounts.

As a bookkeeper I stress to my clients that it is important that you maintain a separate business and personal account for record keeping purposes. I was even advised to use a separate bank which I did more out of convenience than anything else.

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Lee Drozak
My Office Assistant

Hi Layah,

You don't have to if you're a sole proprietor. But even if you are, it's a good idea.

Major advantages of a separate account:
--Record-keeping is so easy when personal and business transactions are on separate statements. It's easy for our accountant come tax time, too--no questions about whether something was or was not a business expense.
--Checks are printed with my business name and address, NOT personal info. That keeps home junk mail to a minimum.
--I keep a smaller balance there than my personal account, which makes it easy to use online services like PayPal without fear that I'm exposing myself to major loss in the event of hacking.

I'll echo Lee here also--there just may be a no-fee option available. Ask at your current bank first. You may be surprised! I use BB&T's business checking account. I get a checking account plus a debit card and pay nothing at all for it--nothing. I had to make an initial deposit to get it set up, but if I remember right, my rep said there was no specific minimum. (I picked $50 because that was enough to pay for my first set of checkbooks and the rent on my mailbox and still have a balance above $0.)

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AnnaLisa Michalski, Sunny Words Writing Services