How Many Bank Accounts Should I Have?

If you’re just starting out as a business owner or you haven’t opened a separate business account, immediately set up a business bank account and start recording all expenses. Things get messy really fast when you’re using your personal account for business expenses and you’ll want to be sure you don’t overpay or underpay in taxes and deduct everything you’re able to track. 

At minimum, you’ll want to open the following: 

• A business checking account for revenue

• A savings account to hold money

• A business credit card for expenses

If you go with the Profit First method, you’ll open five bank accounts:

Income: This account is where all your income goes into.

Operating Expenses: This account is for all of your overhead expenses, inventory cost and miscellaneous cost of business.

Taxes: We recommend saving 15-30% of your income in this account.

Owner’s Pay: This is where you transfer the funds that you pay yourself with.

Savings/Profit: This account is for your savings and to reinvest back into your business.

It’s never too early to get systems in place. Remember this isn’t a hobby. It’s a business. You can outsource bookkeeping, sales tax and Payroll to HarQuin and start researching a good CPA to have ready for handing off your books to at tax time. Get a free bookkeeping estimate here.