Legal, Tax, and Accounting March 2, 2020

How to manage finances for your business

David Jaenike @djaenike

How do you guys manage your finances for your business? Do you set up a new bank account specifically for your business - or do you just route all expenses through your personal bank account and somehow account for that?

If you do use a separate bank account, does anyone have any recommendations for a good service? The light research I've done says that banks will charge a maintenance fee for business accounts. Are there any good services that don't charge a fee?

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    It depends a lot on your location as well as your business structure.

    For example, here in US, having an LLC tied to your personal bank account is a bad idea as that can potentially forfeit a lot of the protection offered by the legal structure.

    Also, I know many banks that waive a service fee if you keep a minimum balance during the month. My bank's minimum is only 1.5k, so it's not a crazy amount to have in reserve anyways.

    In terms of other finance software, I've been on quickbooks for the past year and have like it. I've heard a lot of good things about Wave too, although I did have some trouble in the past importing transactions.

    1. 1

      Awesome, thanks. Yea maybe I'll check out wave. I don't think my site will generate much revenue so even a small monthly fee would represent a significant percentage of my revenue.

    2. 1

      I tried the free version of Wave. Thought it was going to be great, but turned out a bummer. It defaulted my currency on day 1 (without ever prompting me) which can't then be changed. A severe limitation. It took support around 2 weeks to get back to me with that unsatisfactory response.

  2. 2

    Agree with what others have already mentioned. Keep your personal and business expenses completely separate, and software like Quickbooks and Wave can help manage your overall financials. My wife and I run a bookkeeping and tax business, so if you have any questions feel free to DM me.

  3. 2

    David, your answers are going to vary wildly depending on people's location I would suspect.

    Personally speaking, I already have a business account set up for my freelancing. I'm actually looking into switching banks at the moment as the OD charges with my incumbent bank have skyrocketed overnight. I'm looking at Starling & Monzo as they are both no monthly charge, online only banks.

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      I've been using Starling for the past few months and would recommend them! Originally, I signed up for Tide. But they're not a bank, and the card doesn't work with many major service providers (Google & Digital Ocean) – just heads up if you were considering them as well.

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