Introduction
As an Interior Design professional, you know how important it is to create beautiful and functional spaces for your clients. To be able to focus your energy on building your business, it is just as important to create a smart and efficient financial system for your business. Whether you are a sole proprietor, a partnership, or a corporation, managing your business finances is crucial for your success and growth. In this article, we will share some tips and best practices on how to plan and set up your business finances to manage your cash flow more easily, and how working together with your bank can help you achieve your financial goals.
Why You Need Multiple Accounts for Your Business
Some business owners don’t realize you can open and use multiple bank accounts to manage your money and business transactions. Having one account for too many uses can lead to confusion, inefficiency, and potential fraud. By creating multiple accounts for specific purposes, you can better organize and track your income and expenses and ensure that you have enough funds for each aspect of your business.
Here are some of the most useful account types that help businesses manage and keep track of their finances with efficiency:
- Operating expenses account: This is the account where you deposit your revenue from your clients, and pay for your regular business expenses, such as rent, utilities, supplies, marketing, etc. You may even choose to tie this account to a business debit card to make purchases on behalf of the business. By keeping this account separate from your personal account, you can easily see how much money you are making and spending on your business and avoid mixing your personal and business finances. This is critical come tax time!
- Payroll account: Paying yourself and your employees, if you have any, is one of the most important business expenses you must take care of. By having a dedicated account for payroll, you can ensure that you have enough money to cover your salary and taxes and avoid dipping into your operating expenses or savings. You can also set up direct deposit or automatic transfers to make payroll easier and faster.
- Vendor payments account: Use this account to pay your vendors, contractors, and suppliers, such as furniture makers, painters, electricians, etc. By having a separate account for vendor payments, you can reduce your exposure to fraud, since you only use this account for paying your vendors, and not for receiving payments or paying other expenses. You may also be able to negotiate better terms and discounts with your vendors, since you can pay them on time and avoid late fees.
- Business savings account: Here is where you save money for your future business needs, such as expansion, equipment, emergencies, etc. Separating your savings means you can set aside a percentage of your revenue every month and build a cushion for your business. You may also consider using a business savings account specifically to set aside any tax payments you need to budget for.
Conclusion
As an Interior Design professional, you have the skills and creativity to transform any space into a masterpiece. But you also need both financial savvy and the tools to manage your business finances effectively and efficiently. By creating multiple accounts for specific purposes, you can better organize and track your income and expenses to ensure your business continues running and growing. And by partnering with the right financial institution, you can get customized banking solutions that can help you achieve your financial goals.
Main Street Bank is available to you as a financial resource. Contact us and speak to one of our trusted banking professionals who can help you create the ideal banking arrangement for your unique business needs.
About Main Street Bank
Main Street Bank is a locally run, independent mutual savings institution serving Massachusetts, New Hampshire, and the surrounding New England area. Employees of Main Street Bank are united under a culture that strives every day to contribute to our communities by providing customer-focused, innovative products and services for individuals, families, local businesses, and community organizations since 1860, with particular attention to education and financial wellbeing. With locations in the MetroWest and north Middlesex regions of Massachusetts, Main Street Bank provides an extensive array of financial services and products for all personal and business life stages. To learn more, visit www.BankMainStreet.com/.