Many people heed the warning regarding coworkers not to mix business with pleasure, but business owners should also make sure they don’t mix professional finances with personal finances.

Sole proprietors, multiple business partners, and entrepreneurs of all kinds should avoid using personal bank accounts for business reasons. While handling business transactions via a personal bank account may be a short-term solution for people starting new businesses, it’s in the best interest of a company for entrepreneurs to establish boundaries between their professional and personal finances.

Business owners of all kinds should open a business bank account. According to the president of a Wisconsin bank, some benefits of having a business bank account include the ability to identify any IRS business deductions, track expenses and income, maintain clear financial records, and limited personal liability for business owners.

Pick the Bank That’s Best for Your Business’ Financial Needs

The first step to opening a business bank account is selecting a bank. Talking with numerous banks enables business owners to get an understanding of the services a bank provides and any fees they’d be responsible for paying upon opening an account and make a well-informed decision after comparing various financial institutions.

Researching banks is crucial because business banking differs in some aspects from consumer banking. For instance, some financial institutions focus on small businesses, while others specialize in property or equipment loans. Business owners who understand what they’re signing up for will be able to make use of beneficial recommendations from a bank as well as avoid using unnecessary services and products that a bank may persuade them to use for its monetary gain.


The convenience of technology may inspire someone to want to open a bank account online. Business owners should search for banks’ stances and policies on allowing customers to virtually open accounts. While some online-based banks, as well as traditional financial institutions, may allow business owners to open a bank account via the Internet, such services are likely to have limitations to avoid fraud or identity theft.

Business owners who want to virtually open a business bank account with a financial institution that allows them to can benefit from opening an account online with a bank that has a physical branch nearby and an established presence in the community.

Decide If a Business Needs a Savings or Checking Account

An essential consideration business owners must make if they need to open a business savings account or a business checking account. Business savings accounts are practical for storing the money a company earns beyond its working capital that owners handle each day. The capital stored in a savings account can earn interest over time, increasing the worth of the business’s savings. Business checking accounts make working capital more accessible and give entrepreneurs access to cash through electronic payments, checks, or a debit card.


Gather Any Required Documents

When opening a business bank account, the documentation required can vary from bank to bank, as well as depend on the type of business one owns. Sole proprietors of business may only need to have a Social Security number and a tax ID to open a bank account. Large companies and corporations, however, may need to provide more extensive documents, such as a state-issued certificate of good standing, articles of incorporation, and more.

Business owners doing business under a name other than their own must register the business’ name with the state, and provide the bank with this form and proof of state communication or a bill addressed to their company.


A business bank account may need modifying like any other aspect of a business. After opening a business bank account, owners should monitor their company’s bank account to determine if the account type needs changing to garner more benefits.