Freelancing allows you to be your own boss, work with the clients you choose, and build your career based on your terms.
But it’s also a lot of responsibility, especially when it comes to money. If you’re not careful, managing your finances can be a big jumbled mess. Mixing your personal money with your business transactions or vice versa will haunt you later. This is why it’s imperative that you open a business checking account. It’s not only a smart decision; it’s a necessity. Having the right account will help you stay organized and in control as you work toward reaching your long-term goals.
Keep Your Finances Clear and Organized
One of the most common freelancing mistakes is using a personal checking account for business expenses. You get a new client, they pay, and the money goes into your bank account. Sounds like a reasonable process to some. But when tax time comes, you’re stuck trying to sort business purchases from everyday spending. And to be honest, that’s the last thing you want to do.
Having a business account eliminates the need for you to have to do all this work later on. It streamlines your finances, makes tax deductions a breeze, and gives you a bird’ eye view of how much money you’re making. When it comes to building a sustainable business, every little bit helps.
Make Tax Time Less Stressful
Truly, nobody enjoys the tax man at tax time, but for freelancers, it’s a little more work. But, if you have all your transactions in one place, it makes it easier to know what you can deduct as a business expense. Since all income flows in and out of one account, you don’t have to wonder if that purchase you made at Target was business-related.
Plus, you can give your tax accountant or accounting software access to your account so they can pull the information they need to help you with quarterly and year-end filings.
Look More Professional to Clients and Partners
While benefits are enough from a convenience standpoint, signing up for a business checking account elevates the way you do business, too. When you send an invoice, receive pay, or create checks, your business account domain is shown, which also boosts name recognition.
You’ll also want a business account if you ever plan on applying for a business credit card, loan, or grant. It shows that the business owner is serious about their business. While lending decisions are made based on many factors, having a separate business bank account can make all the difference.
Access Business-Friendly Banking Features
It’s the fastest way for freelancers, consultants, and entrepreneurs to have a place to store their money. Most banks offer unlimited transactions and mobile banking, and there are even places that offer features that allow business owners to connect their online invoicing software to their bank account.
Take the financial technology company, Bluevine, for instance. Their freelancer-checking account solution lets you freelance on the go, earn interest with your deposits, and access freelancer-friendly perks without excessive bank fees.
Get Paid Faster and Manage Cash Flow Efficiently
Dealing with referrals is something many freelancers struggle with. Some have amazing months, while others crawl by. Freelancers need a business checking account to manage finances in between inconsistent pay periods, earn money from their money, and cash in on the benefits big banks don’t offer without the extra fees.
Small business checking accounts give you benefits like faster payment processing, multiple payment acceptance options, and direct deposit capabilities to get paid faster and manage your growing money better.
Prepare for Business Growth and Future Expansion
Even if you’re a one-person show, you may eventually consider hiring someone, creating an LLC, or applying for a business loan. Having a business checking account now allows you to start doing more business things when you’re ready to scale.
Creating healthy money habits now will set you up for success later. Whether you plan to stay solo or grow your business, being organized with your money in a separate account will help you on the road to growth.
A Simple Step with Big Benefits
It may sound small, but opening a business checking account can do nothing but help you better manage your money, prepare for taxes, and show up more professionally in your freelance space. You’ll save time and prevent unnecessary stress when it comes to finances.
Freelancing and entrepreneurship already have enough stressors. Don’t let messy money habits become another one. Take control of your business today and create a long-term plan for success.
