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4 Business Bank Accounts to Set Up as an Entrepreneur

Business

January 3, 2023

Since it’s the New Year, I know you’re probably thinking about tax season, getting organized, and all the things regarding money, finances, tax statements, expenses, am I right?

Soooo… I figured this would be a great time to take you behind the scenes a little bit and share what bank accounts I have set up in MY business so everything is organized, and runs effectively and efficiently.

These bank accounts consist of a blend of checking accounts and savings accounts (yes, multiple), and I highly recommend incorporating them into your business as soon as you can. These accounts are truly a must for my 6-figure online business!

But first…

I really hope that I don’t need to tell you the importance of having a business checking account, but if this is news to you, please know that it is extremely important to have a separate checking account for your business and make it totally separate from your personal checking account

Personally, I just use the same bank as I do for my personal checking account, but that is totally up to you. It is a personal preference, but I just find using the same bank easier when it comes to checking accounts. That being said, I highly, highly, highly recommend you have at least one business checking account set up if you plan on making money this year, which I’m sure if you’re listening to this, you probably are.

Depending on the state, I believe that you don’t have to file taxes unless you have made a certain amount of money in the year. I believe in Georgia it’s $600, but please don’t quote me on that. I am not a CPA. I am not a bookkeeper. I’m not giving tax advice here. So, definitely get in touch with your CPA or bookkeeper to determine this for yourself.

Now, if you need a CPA or bookkeeper, feel free to send me an email or Instagram DM. I have a bookkeeper and a CPA that I have been using for a few years now, and I highly recommend them. You actually work with them separately, but when tax time comes around, they work incredibly well together, making the whole process just super simple.

I cannot recommend them enough. I’m always super stressed around tax season, but they have just made it so simple that I don’t have to stress, and it is wonderful. That being said, though, I am going to recommend that if you are making money in your business, you need to have that one business checking account.

So, at least start there. I’m gonna be telling you all the accounts that I do have, but at least have that one business checking account. Then when you actually start bringing in a full-time income online or you know, wherever your business is, I’m going to recommend that you set up these other accounts in addition to the one business checking account.

Checking Account #1 – Income Account

For checking accounts, I actually have two for my business. 

The first one is my income checking account. Now, the income checking account is where all of my income comes in, so all of the money that I am collecting in my business goes into this account.

The really cool thing about this account is that you don’t actually need a debit card because all you will be doing is having the money transferred in. So, when people pay you, this money gets transferred into that account, and then you’ll actually be transferring out of this account and dispersing it to other accounts that are used.

Essentially, you would pay yourself from this account so you can transfer money from the income checking account to your personal account, and then you can also transfer funds from this account to your savings account. That said, I have savings accounts that are separate for my business in addition to my personal savings account. 

The other purpose for this account is that you can actually transfer money out of the income account into your operations checking account, which is checking account number two. 

Checking Account #2 – Operations Account

Checking account number two for my business is the operations account. The operations checking account is the account that my business expenses are taken out of. This is the only business account that I have a debit card for, and it is the account that all of my subscriptions, my investments, etc. come out of.

Now I’m sure you’re wondering…

Why do I split up the two? 

Whis is just a personal preference, but I personally love being able to see the funds coming in separately from the funds coming out.

In addition, let’s just say someone gets my debit card number from my operations account, and there are fraudulent charges on there. If I have only transferred the amount of funds that I need for my operations, aka all of my expenses that I need to run my business, they can’t actually get the funds that are in the income account because I haven’t transferred it over.

In addition, they’re not actually getting what I’m paying myself. They’re only getting that certain amount. Now, of course, you can always get your money back by reporting fraudulent charges, but no one wants to deal with that, so this is just another layer of protection.

Personally, I just appreciate that it’s just more safe having the two split because I’m actually not using the income account anywhere, right?  I’m not charging anything on that account, so it’s going to be a lot harder for people to actually get that account info unless they’re just hacking into the bank account.

Personally, it just makes the most sense in my mind to have two separate accounts. It works really, really, really well for me. And again, I just like seeing it separate like that in addition, so it just works. 

Savings Account #1 – Tax Savings

Now, next up, we actually have savings accounts. In addition to my personal savings accounts, because I also have some of those, I have two savings accounts that I recommend that you have for your business.

The first one is your tax savings accounts. Now again, I am not a CPA or a bookkeeper. I’m not giving tax advice, but you do need a place where you are putting money back for your taxes. 

That said, all of my savings accounts are actually in high yield savings accounts, which means that interest accrues over time, and I actually make money for having money in there.

All of my savings accounts, personal and business, are located in CapitalOne. They have a really great high-yield savings account, and I highly recommend it.

I have multiple savings accounts in there because I like to save for different things. But two are for my business specifically, and again, the first one is for tax savings. 

Savings Account #2 – Hills & Valleys Fund

The second savings account is called the Hills and Valleys Fund

I actually saw the idea for this savings account from someone on Instagram. I was just scrolling through, I saw it and I loved it! I can’t recall who it was that talked about this so if you know who it is, please let me know. I’d love to give them credit. It is such a great idea!

But essentially, the concept is that the Hills and Valleys fund is a savings account for your business when you are going through some valleys. As a business owner, it’s very likely that your income is going to be different every month, and the idea here is that when you have good months or a really great month, you put aside money in this account to help you when you are going through some not so great months. 

So, let’s say when you have the best month you’ve ever had financially, you will obviously put aside a lot more so that when you have a not-so-good month, you can take money out of that fund. Now, this is a little bit different from the standard emergency fund, right?  Emergencies are things like if your car breaks down, or you have to unexpectedly take your dog to the vet.

This is more so to keep you from going in the red on a typical month. 

Recap & Next Steps

As a recap, we’ve got two business checking accounts…

One is for income. That’s where your money comes in. The other one is for operations, which where your money goes out. 

Then we’ve got two savings accounts…

One for tax savings, so you’re going to be putting money back from the income account into the tax savings account.

Then you’ve got your Hills and Valleys Fund where you are going to put money back when you are on a hill so you can actually pull from it in your valleys. This will keep you from going in the red when you have a not-so-great month. 

All of that being said, please don’t feel like you have to have all of these accounts just because this is what I do. Please do what is best for you.

This just helps me get really organized and helps me visually see just where my money is going and what it’s being used for, instead of just having one business account. But again, please do what is best for you. Contact your bookkeeper. Contact your CPA. Take what works for you and leave what doesn’t.

I really do hope this blessed you and gave you some ideas for your own business. Now, if you have any questions over this whatsoever, or you just wanna let me know that you’ll be implementing something that you learned from this blog, please join our Facebook group. You can do so by heading to the link here

In addition, if you love this podcast and you love content like this, then you have got to get on the list for Make It Reign Mail so you can get Faith-Fueled Life and business coaching delivered straight to your inbox.

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top posts

fitness

coaching

01.

Get Anything You Want in Life

02.

Meditation for Beginners (3 Steps!)

03.

The Story Behind my 1st $20k month

04.

Being a Future Based Thinker

CATEGORIES

Faith-fueled

business

Faithful action

coaching

marketing

personal


Attract  your Queendom

click here to access my free guide to attracting the right queens.

join the community

tell me more!

I'M HANNAH. 

A FAITH-FUELED LIFE + BUSINESS COACH, OVERPROTECTIVE DOG MOM, AND JESUS LOVER.

Hey Queen!