Personal vs business: What Checking Account Is Right for Me?

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When running a small business, it can become a bit confusing to keep track of your personal finances versus your business finances. When dealing with a business where you aren’t acting as the sole proprietor, it is easy to come up with banking solutions for writing checks, paying bills, and having a business account where you can deposit checks. However, there are some options if the goal is to use a personal checking account for your business.

Having a Separate Business Account

A business checking account acts as a referee, keeping your personal money separate from your business income. They come with great features such as unlimited check writing, which is helpful to cover the larger number of transactions that occur in a personal account.

A drawback of using the personal checks is that it may tarnish the image of your business you are trying to portray. It’s fun to get your dog frolicking on the beach as your check background, but your clients might not appreciate getting paid with that as much as your niece does when she receives her birthday check. Unfortunately, it is difficult to get the business name and information included on the account unless it is “doing business as.”

Depositing Checks

There is a big problem that people run into, which is when you are attempting to deposit a check that is made out to your business name. If the business is being operated under a name different than your own, you may run into problems depositing the business check into your account. It is only when you and your business are legally acting as the same that you will be able to use a personal checking account for your business. You also must have the business checks personally made out to you. For this to occur legally, there is only one legal business entity where this can happen, and this is a sole proprietorship.

Another way to accomplish this is by doing a “doing business as,” also known as “dba.” You still would open a business account in your name but would add this on followed by your company name. Doing so would allow deposits to be made into the account by both business checks and personal checks. This account is considered to be a business account, but you can then use it as both your personal and business checking account.

Fictitious Name

When opening a new business account proof of identity is important. In some cases, they may require you to show what is known as a fictitious name certificate. This document will show both the legal name and the operating name of the company. It is a little different in the case of a sole proprietorship. In this instance, you would be using your own name, and this would act as the legal name. The operating name, however, is the name you are calling your company.

Keeping track of everything is a tad mind-boggling when you start up a business. Don’t forget that you always have options and there are plenty of people out there to help!

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