Say you’re at Walmart buying shampoo and you notice that they have a sale on file folders. You purchase both items using your debit card and then you have to remember to keep the receipt so you can expense the file folders as part of your office supplies. Annoying right? Tax time paperwork anxiety attack waiting to happen?
I can’t stress this next point enough. The best way to avoid this type of situation is to set up a dedicated Business Bank Account. It’s inexpensive, simple to set up and will make your business transactions so much easier to manage.
Same scenario at Walmart but in this case I simply pay for my shampoo on my personal debit card and then pay for the file folders on my business debit card. Easy peasy! Even if I lose the receipt I can still track expenses for my business through my monthly statement. (You may not be able to claim them without the receipt but at least you’ll know where the money went.)
My advice when setting up an account is to definitely shop around for the available services and monthly fees charged. Business accounts are handled differently than personal accounts so don’t be surprised if your personal bank does not offer the best options for your business requirements.
Debit Cards, Cheques, and even Credit Cards all dedicated to your business account really elevate managing your business to the next level. Trust me your bookkeeper will thank you. Good luck!
*Please Note: Beware of a Paper Fee charged for “mailed” monthly statements! My bank recently started charging me $2/mailed statement and let’s just say I am not impressed. I can still get statements for free via e-mail but then I print them off anyway having to use my own paper and toner to do so. For tax reporting purposes I believe that businesses should automatically get their statements for free. (In my opinion if they wanted to save some trees they should have started charging that on the mailed personal statements instead.)