If you’re new to the virtual assistant world, you may or may not have thought about if it’s okay to use your personal bank account. I mean, what could really be the harm in doing that? Is it really that big of a deal if a client pays you, and the money goes directly to your personal checking? Isn’t it okay if my business expenses are paid using my personal account? You’ll want the answers to these questions before you get in too deep. So I’m going to set the record straight on what you should know about virtual assistants and business bank accounts. That way, you don’t find yourself in an undesirable situation down the line.
Can I Use My Personal Bank Account for my LLC?
You’ve formed an LLC (limited liability company) and are ready to get paid, but where should the money go? Well, if you’ve registered an LLC, you should definitely use a business bank account to handle business transactions. But, unfortunately, when you use your personal bank account, you end up missing out on important legal protections.
In the eyes of the court, a corporation is its own entity and should be seen as separate from the individuals who own it. So if your virtual assistant business were sued, your personal assets shouldn’t be considered in most cases.
However, if you’ve got business transactions flowing through your personal checking account, guess what? It’ll be hard for a court to see you and your LLC as separate entities. Instead, you and your business will be seen as one and the same. As a result, your personal assets may no longer be protected because you’ve mingled your finances. See why it’s essential to know about virtual assistants and business bank accounts.
I’m A Sole Proprietor. Can I Use My Personal Bank Account?
As a sole proprietor, you’re not legally required to have a business bank account. However, in my humble opinion, you still should. I’ll mention a few of those reasons below.
6 Reasons Why Virtual Assistants Should Have A Business Bank Account
Here are 7 IMPORTANT reasons why choosing a business bank account over a personal one is better.
#1 It Makes You Look More Professional
You can get your business name on checks, credit cards, and more when you have a business bank account. You’re just not going to get that with a personal bank account. To clients, you’ll come across as more serious and established. Others will also be able to tell that your virtual assistant business is the real deal and not just a hobby.
#2 You Can Accept Credit Card Payments
Listen, as a virtual assistant; you’re more than likely not going to be accepting cash payments. And if you do, clients (and myself) will find that pretty sketchy. You don’t want to shut the door on many clients by making it difficult for them to pay you.
Sure, Venmo, Zelle, and CashApp are options, but not all clients are going to be okay paying like that. Most prefer online merchant accounts like Stripe, Square, and PayPal. In order to successfully utilize those merchant accounts to accept credit card payments, you’ll want a business bank account.
#3 You Can Get Business Credit Cards
Do you like perks? I like perks. Many business credit cards come with some pretty nice welcome bonuses, special rewards, and higher credit limits. They also give you a way to separate your business expenses from your personal ones more easily.
#4 Makes Tax Preparation A Lot Easier
During tax time, the last thing you (or your accountant) will want to do is go through your personal checking account, trying to figure out what’s a business expense and what’s not. In addition, you’re expected to pay quarterly taxes as a virtual assistant, so having a business bank account will make estimating what you owe less complicated.
#5 There Are Also Tax Advantages
Hear me out – virtual assistants and business bank accounts matter, especially for this reason right here. A number of business expenses can be deducted, like professional fees and business meals. Unfortunately, it will be hard to tell what’s actually a “business” expense if you’re using your personal bank account. Proper record-keeping will make it easier for you to take advantage of the deductions you rightfully deserve.
#6 You Can Set Up Accounting
Accounting software is a really essential tool for your company’s financial data. If you’re new to being a VA, you might not understand why just yet. But as time goes on, it’ll start to make much sense. It helps you see how money flows through your company and identify costly discrepancies. Reports will allow you to assess your company’s financial health so you can see if you’re heading in the right direction. You’ll need to sync your business bank account to do this, but if you don’t have one, that’ll make things tricky.
Virtual Assistants and Business Bank Accounts Go Together
You need a business bank account if you’re a virtual assistant with your own business. This is something that I’ve found necessary since the very beginning, and I don’t regret making it a priority. In the long run, it’ll only make it easier for you.
