Still using your personal checking account for your business?‍

When starting a new business, there are myriad tasks and details for new owners to manage — everything from obtaining a business license to hiring employees and buying or leasing business facilities.

Another important task is choosing a business bank and setting up a business checking account. Some owners try to run their business finances through a personal checking account, but it’s usually a good idea to set up a business checking account instead.‍

Here are 6 benefits of establishing a business checking account:

1. Separating personal and business finances — it’s important that personal and business finances not be comingled, or mixed together. The best way to accomplish this is to set up a business checking account and use this strictly for business finances.

This will make it much easier to track business income and expenses and pay business taxes. Personal and business income are usually taxed separately so keeping track of this can be difficult, if not almost impossible, without separate checking accounts.‍

2. A higher degree of professionalism — having a business checking account helps demonstrate that your company is a real business entity and not just a pastime or hobby. Using personal checks to pay for business expenses doesn’t look very professional, which can reflect poorly on you and your business.

Your business checks will include the name and address of your business, as well as your business logo if you choose. These might seem like small details, but they’re important for most new startup businesses.‍

3. Obtaining a business loan — one day you may need to apply for a business loan to expand your business, cover cash flow shortfalls or take advantage of an unexpected opportunity. In this scenario, having a business checking account will help improve your chances of getting approved for a loan.

Before loaning money, lenders usually want to see that a business has established its own accounts (separate from the owner’s personal accounts), stable business income and a high credit score. This can be hard to discern without a separate business checking account.‍

4. Accepting credit and debit cards — with so many customers today choosing to pay with plastic instead of cash or check, accepting credit and debit cards is no longer just an option for many businesses — it’s a necessity. And most banks and merchant card processors require businesses to have a business checking account to set up a merchant account.

Credit and debit cards may also enable you to do business online. Not establishing a business checking account could severely limit your sales opportunities by restricting your ability to accept credit and debit cards.‍

5. Reducing personal liability — having a business checking account can protect you personally from certain business liabilities by keeping your business and personal financial affairs separate.

For example, if your business has been set up as a Limited Liability Company (LLC) and is sued, litigants cannot attach your personal assets — they only have access to your business funds. Without a business checking account, you could lose this personal liability protection.‍

6. Enjoying business-focused features — business checking accounts usually include unique features that are geared toward the businesses that will use them. These includes features that make it easy to accept credit and debit card payments, payroll software that’s build into the account and integration with business bookkeeping software, among others.

If you don’t currently have a business checking account, consider how opening one could benefit your business.