If you’re getting into business for yourself, you need to make sure you’re setting up your enterprise appropriately. That means getting off on the right foot financially by opening a self-employed bank account online. Whether you’re starting a new business or looking for a better way to keep track of your finances, a self-employed bank account from an online bank offers significant benefits to business owners. 

Here’s all the information you need to set up a bank account the right way, and a few considerations to make while looking for the right institution to open your account with. 

Do you need a business bank account if you’re self-employed?

While you don’t legally need a business bank account if you’re self employed, it’s strongly suggested that you open one. A business bank account helps you put your business in a position to grow by helping you separate and track your business’ finances. 

As your business gets bigger, you’ll be able to properly manage cash flows, pay and get paid quicker, and manage your growing financial responsibilities more transparently. Most importantly, a business bank account will help you keep your business and personal finances separate.

The benefits of a business bank account

As a self-employed sole proprietor, it’s completely your choice to open a business bank account; but, you’re missing out on a few great benefits if you choose not to. Some of the key advantages of holding a business bank account include: 

  • Money management. The key to success as a self-employed business owner is good fiscal oversight. You need to manage your money in a way that promotes growth and flexibility, and it all starts with making sure you have insight and control over every dollar that comes into and flows out of your business. A business bank account is your foundation for good money management. 
  • Simplify taxes. If you’re a sole proprietor, bookkeeping is much simpler with a business bank account. It’s easier to see tax deductibles or allowable expenses that could save you money on your taxes. Plus, you’ll have clear and concise records come tax season, since your business’ operations are specific to an account (or set of accounts). 
  • Access to capital. Need a loan to grow your business? A line of credit to promote flexibility? It’s easier to secure a loan when you have a business bank account and a relationship with an online bank. Online banks offer simplified loan applications, requiring less paperwork for faster approval.

Banking features for self-employed business owners

When you’re shopping for online banks to partner with for your business, consider the features they offer. Your business bank account is much more than just a place to store funds; the right one can also help you do business better. Features to look for include:

  • App integrations: Online business bank accounts offer the ability to sync and share information with accounting software like QuickBooks, as well as other software in your business’ tech stack, making bookkeeping easier and more accurate. These integrations are a crucial part of growing your business, while also simplifying your responsibilities as a business owner. 
  • Mobile check deposits: With an online business bank account, there’s no need to run to the bank to deposit cash or checks. Mobile check deposits simplify your life, helping you manage payments much more efficiently.
  • Budgeting tools. Some business accounts offer budgeting and planning tools that make managing cash flows simpler for growing small businesses. Features like NorthOne Envelopes pave the way to better financial planning, one purposeful dollar at a time. 

What are the best banks for someone who is self employed?

While there are plenty of options when it comes to banks for self-employed entrepreneurs, not all banks give solopreneurs and self-employed startups the attention they deserve. Online banks like NorthOne, on the other hand, cater primarily to smaller business clients. You get all the features you need to do business seamlessly, so you can focus on setting  yours up for growth.

Frequently asked questions

Do I need a business bank account for a sole proprietorship?

While there’s no legal requirement for a sole proprietor business bank account, it’s a wise idea to open one. It’s recommended to open a separate account from your personal account, to save you money and hassle in the long run.

Do I need a business bank account for a single-entity LLC?

One of the main reasons people choose to form single-entity LLCs is because they provide the owner with liability protection. To ensure you’re given those protections, you need to operate the LLC separately from your personal finances. A single-entity bank account is the simplest way to distinguish the LLC’s revenues and expenses from personal accounts.

Do I need a business bank account to get a debit card?

Yes, you need a business bank account to get a debit card for your business. A debit card provides access to funds within a checking account, which means you need to establish and fund the account before you can use a business debit card. 

Establish your self employed financial position

Whether you consider yourself a freelancer or sole proprietor, it’s a smart idea to have a business bank account. Thanks to the online banking options at NorthOne, you can quickly get access to the features you need to keep your business on track. It only takes a few minutes to take the next step to secure your business’ financial future. Apply with NorthOne today!