Rules for Your Business Checking or Savings Bank Account

Your business bank account is for business use exclusively. It is not a personal account. Treat it with great care and respect and guard it carefully.

Even a Sole Proprietor’s “DBA” (Doing Business As) bank account is a business account. It is not a personal account nor is it an extension of your personal account.

Follow these rules for good stewardship of your business bank accounts.

  1. Use your business checking account for business deposits and business checks and debits only.
  2. If you receive money from a customer, deposit the full amount received into your bank account.
  3. If you are taking an owner draw, write yourself a business check and write on the memo line: Owner Draw.
  4. Do not write checks from your business bank account for personal purchases or personal bill payments.
  5. Use your business debit card for business purchases only. Do not use it for personal purchases.
  6. Do not transfer money to and from your business bank account and your personal accounts.
  7. If you need to put money into your business bank account from a personal bank account, write a check to the business. On the memo line, write: Owner Contribution.
  8. If you deposit owner cash into the business bank account, make sure you note this on the bank statement when you receive it. Just write “Owner Contribution” next to the cash deposit amount.
  9. Do not link any personal accounts to your business account, including PayPal or a Credit Card. (Although, a personal credit card used exclusively for business purchases is acceptable for a small business which hasn’t established its own credit, yet.)
  10. Get receipts for every single purchase made from the business bank account. Match these receipts to the items on your bank statements.
  11. Record a sales receipt or write an invoice for every single customer sale, purchase, or order.
  12. Keep a copy, either electronic or paper, of all your bank statements for your business bank accounts.
  13. Review your bank statement immediately upon receipt. Make a note next to each item stating the purpose of each credit and debit. (This is especially helpful if someone else is keeping your books.)
  14. Review your bank statement immediately upon receipt to make sure there are no questionable debits. If there are, let your bank know immediately.
  15. Always safeguard your business bank account . Secure extra checks and keep your debit card in a safe place.

Keep all your business finances separate from your personal finances. If you are ever audited by the IRS or State tax authority, you will be better able to defend your expenses. You will also have more respect for your business and feel like the Entrepreneur you really are.

Leave a Reply