Busy company owners put in long hours and hard work to maintain their operations. One effective way to help keep their companies on track is through a separate bank account. From sole proprietorships to larger corporations, Putnam 1st Mercantile Bank in Cookeville, TN, specializes in offering a wide range of business checking accounts. Here, the locally owned institution shares several reasons why it pays to have one tailored just for entrepreneurs.

What Are the Benefits of a Business Checking Account?

1. Provides Proof of Operation

A separate business account shows evidence a company has been established. This is an important distinction for the IRS and state tax authorities seeking documented proof. Company owners are generally required to submit profit and loss statements every three years. Having an account can help back up those figures.

2. Gives More Accurate Financial Records

When it's time to file income tax returns, entrepreneurs can refer to their business checking accounts for accurate financial records. It's a much more efficient way to show that all transactions and statements are business-related and not mixed in with personal finances. In addition, the account becomes a backup to receipts and invoices collected each year.

3. Meets Tax Requirements

Business owners who filed and submitted paperwork to incorporate their companies are required by the IRS to maintain a separate business checking account. This includes certain types of sole proprietorships, partnerships, and corporations. 

4. Helps Prepare for Potential Audits

If a business owner receives an audit notification from the IRS or state tax authorities, their first reaction might be sheer panic. However, if the entrepreneur has established and maintained a business checking account, it can help provide banking activity proof during an audit. Coupled with clear and consistent bookkeeping, the audit process is likely to go much smoother.

While there are a lot of responsibilities involved when you run a company, having a separate business checking account can help with the stress. Let Putnam 1st Mercantile Bank help put your company on solid financial footing with its suite of business checking accounts. To learn more about all of their services, visit their website. If you have additional questions, call (931) 528-6372 to speak with a friendly representative.