Business Account or No?

[blessed mom]

Ok...I do all the money stuff in our house...pay bills etc. Hubby swore I needed a business bank account but now I'm struggling to figure out why I need one? Why deposit the money into the business account only to transfer it back to the bill paying one? Worse is I could pay some from the business account but then I'm just splitting up the money instead of having it all in one place and knowing how much money there is. We are stretched right now financially and I really need two more kids so it's not like we are "banking" any extra money...there isn't any.

Comments? Ideas? Thoughts? :confused:

[Crazy8]

someone just posted this recently.

https://www.daycare.com/forum/showthread.php?t=33115

I do not have a business account for the same reasons you mentioned. My daycare income is my personal spending money - I see no plus to having a separate business account.

[Michael]

Separate your business from personal. It makes it easier for tax time and if you are ever audited.

[learn-n-grow]

I have a business account. The just have most of the bills come from that account and make purchases for supplies, etc. from that account as well. I transfer money to my personal account for my personal spending. I just want to seperate my personal spending from business.

[Crazy8]

Separate your business from personal. It makes it easier for tax time and if you are ever audited.

I'm not seeing how much easier it makes it. 90% of my deposits are daycare checks and my income is shown in receipts/income statement forms moreso than from my checking account. I also don't have very many 100% daycare expenses, most are time/space calculated expenses. As long as you keep good receipts I don't see how a separate checking account really matters.

[Unregistered]

I'm not seeing how much easier it makes it. 90% of my deposits are daycare checks and my income is shown in receipts/income statement forms moreso than from my checking account. I also don't have very many 100% daycare expenses, most are time/space calculated expenses. As long as you keep good receipts I don't see how a separate checking account really matters.

It's more of a timesaver for me. No dividing up a single supplies receipt into what's for the daycare and what's for my family. I can just look at the account number on a debit receipt and know. Makes the accounting easier, and takes less time to figure out my profit. Also a good way to see if my expenses are going up and it's time for a rate increase!

[blessed mom]

It's more of a timesaver for me. No dividing up a single supplies receipt into what's for the daycare and what's for my family. I can just look at the account number on a debit receipt and know. Makes the accounting easier, and takes less time to figure out my profit. Also a good way to see if my expenses are going up and it's time for a rate increase!

I dunno...I rarely buy for just one or the other so...I'm not sure of the benefits at this point. Maybe when I start making more money it might be worth it but right now it's way more work then it's worth.

[awestbrook713]

I have a business account. I deposit the money into my business account and use my business debit card for business purchases and at the end of the month I write myself a check for the money I need to put towards the bills we have and need to pay. So much easier and worth having when you think about tax time.

[jojosmommy]

I posted this earlier when someone else asked this question. I edited out the stuff that doesn't apply to your question But here it is again:

I have a seperate account just for business. All my checks or e payments go into this account. I have a check card and actual checks which I use to pay for things that are 100% business expenses. I split things up when I shop- I use my personal card for food and non deductable expenses and my business card for business/deductable things like paper products etc. I still enter them into mmk and claim the necessary % based on my time space but I find it helpful to keep things seperate.

I fund transfer myself from my business account to my personal account as I need. No need to write yourself a "paycheck". Tom Copeland says you can pay yourself in whatever manner you choose. I just prefer to have proof that the money parents are paying me is going into a seperate account first.

I did get audited recently and I think having a business only account is a must. Someone on here also recently mentioned getting a bunch of bank fees from not having enough funds when a clients check bounced. Keeping things seperate affects less of my personal spending when something like this happens.

My husband's paychecks are never deposited into my business account and say I do something for cash like a garage sale (or he does) it doesnt look like we are trying to hide some of our income when we have unaccounted for deposits.

When I record my mileage to the bank and stores into my mmk I just log onto my bank account and look in my business account. Much less to remember and account for.

Additionally, Someone recently asked on here how they could prove income and I think it would be mush easier if you have your own account. That way I don't have someone snooping through my personal purchases. Just print out monthly deposit record.

[lovemyjob]

don't bother with business account

I too bought into the opening of a separate business account for my childcare. Only to find out that :
1) if you are audited, you have to supply statements from all bank accounts (personal and business) anyway. I learned that from Tom Copeland
2) it is more to keep track of and all i was doing was transferring monies from 1 account to another and
3) per the bank...business checks take longer to make funds available to you...so instead of a 2 day wait, it was often 3 or 4. I found that really annoying, especially when the checks consistantly come from the same 3 or 4 families.

That being said...if I weren't living paycheck to paycheck pretty much, I would love the flexibility to write all business expenses seperately. However, family childcare has too much overlap of things. Stay with your personal account...just clearly mark your checks on the bottom if they are business or not. Simple enough.

[blessed mom]

I too bought into the opening of a separate business account for my childcare. Only to find out that :
1) if you are audited, you have to supply statements from all bank accounts (personal and business) anyway. I learned that from Tom Copeland
2) it is more to keep track of and all i was doing was transferring monies from 1 account to another and
3) per the bank...business checks take longer to make funds available to you...so instead of a 2 day wait, it was often 3 or 4. I found that really annoying, especially when the checks consistantly come from the same 3 or 4 families.

That being said...if I weren't living paycheck to paycheck pretty much, I would love the flexibility to write all business expenses seperately. However, family childcare has too much overlap of things. Stay with your personal account...just clearly mark your checks on the bottom if they are business or not. Simple enough.

Ya we are in the same boat...a lot of overlap. However we already have the business account set up. Unless I undo it all...I dunno. I may just keep it and then write myself a check once or twice a month like someone suggested. My business and personal accounts are at separate banks cuz business accounts typically need a lot of money initially deposited which we don't have. This local bank doesn't require all that so it's free to bank there. Thanks for all the feedback...I haven't had to file taxes yet so I guess that is where I can't see the tax benefit...but I surely don't want to be audited! Ug