5 BANK ACCOUNTS You Need For Your Small Business

the year is 2021 you survived a pandemic and you're up on your cryptocurrency profits you decided to start a new business and you're going into your bank to open up a new account for your business you decided to start maybe it's an llc how many bank accounts did you set up was it one was it two checking accounts three checking accounts many business owners want to manage their expenses correctly with their business and they want to know how many accounts it makes sense to establish as a new business owner my name is carlton dennis and in today's video we're going to go over how many business checking accounts you need to establish in order to run your business efficiently with the least amount of headaches as possible i currently have a couple of different entity structures and it was important for me to establish my entity structures the right way but also make sure i have the correct number of bank accounts underneath those entity structures so in today's video we're going to talk about how many checking accounts it might make sense to have being a llc owner this video is sponsored by hatch hatch business checking account is specially designed for small based business owners like you and i that are looking to receive rewards i love being able to know that i have no nsf fees and i get to receive up to five percent cash back on things i already spend my money on gas restaurants and using yelp these are the types of things that this hatch business checking account card allows for us to receive cashback rewards on so make sure that you go to hatch.com so you can check it out or visit the link in my vial below to get one year off for free let's dive in [Music] having a business is so exciting but one of the most exciting parts about being a business owner is knowing that you get to save money on things that you normally aren't able to save money on and when you start accounting for those expenses these new items that now are business related you're going to have your bank account set up accordingly to make sure you're capturing all your income and capturing all your expenses and the number one bank account that you need to establish first is going to be your operational account most business owners when they start out in business will go ahead and use their business checking account to get it set up and they'll start operating their business out of their operational account this operational account typically maintains your income that you're receiving on a monthly basis and the expenses that you're having on a monthly basis the type of expenses that come out of your operation account are typically going to be payroll contractor costs they're going to be your subscriptions your rent payments these are the types of payments that you are anticipating happening on a daily monthly or annual basis so this is why we want these type of expenses coming out of our operational account and why we want to establish the operational account as the first account second account that we want to consider is our advertising marketing account advertising marketing account is extremely important to have especially after what we just saw in 2020. i had a lot of clients that didn't end up making money in 2020 because they had no online presence and they didn't take it upon themselves to get the proper marketing and ads up there were a lot of clients that did make shifts they were able to pivot they went to online product sales they started making a killing off e-commerce and some of them even just completely abandoned their businesses and started day trading which is fine with me but if you're truly a business owner you need to market your services you need to have people coming in the door and how you do that is by having the correct amount of money being allocated over into your ad and marketing account i advise my business owners when they go through tax planning with me to establish a 20 rule 20 of the income profits that you make inside your business on a monthly basis get allocated over to your ad and marketing account this is an account that you get to utilize to repurpose this income back out into the world to bring you more business this is money that you want to almost think about as it's gone and lost forever but it's the money that's going to help you make more money and it's so important that you spend money to make money and that's the mindset that most wealthy business owners get into is they realize that it takes money to make money to go for the types of subscriptions and expenses you could have inside of your ad and marketing account you could have facebook expenses instagram expenses linkedin expenses you might pay for paid ads seo these are the types of expenses that you would have occurring out of your ad and marketing account number three your savings account this goes without saying that most business owners should have a savings account but this isn't a savings account for your taxes this is a different savings account part of the reason why it's so important to have a savings account inside of your business is because just like having personal savings is important when things can go away things can go awry things can go away things can go away things can go awry or there could be disasters or life unexpected incidences that could come up you need to have emergency funds as a business owner it is always recommended to have six to nine months of emergency funds set aside inside of your savings account that you have underneath your business if you set aside six to nine months of expenses in the event of another pandemic you have six to nine months of expenses to cover yourself this buys yourself time to be able to figure out ways to pivot which is something many business owners didn't have the luxury of doing in 2020 it gives you the time to sustain and come up with new processes and procedures and it allows for you to stay afloat during unexpected times and circumstances one thing i urge all business owners to do new and experienced is to have at least six to nine months of profits set aside into your savings account in the event of an emergency now that we've gone over operational accounts savings account and we've gone over our ad and marketing account now it's time to go over our opportunity account this actually happens to be my favorite account but it's the account that's pretty hard to build because many business owners won't focus on creating an opportunity account what is the purpose of having an opportunity account well without really looking at the word you understand that there are opportunities that come up as business owners are you going to be in a position where you don't have to dip into your savings fund your emergency account to be able to capitalize on opportunities or maybe once in a lifetime opportunities i remember that there was an opportunity that came by that allowed for me to get a certain level of verification that i wanted to get i had the opportunity to spend money to get this certain level of verification because i set aside money into my opportunity account to be able to qualify to get this certain level of expense that i needed to spend money on you see i strategically mapped out in my business to have money available in case an opportunity came by rather than me having to dip into my savings account which is the account i'm not supposed to dip in because that accounts for emergencies if a pandemic happens and i need to dip in that account to plan my employees that's the account i need to go to not my opportunity account so it's important that i have that account for when this opportunity came by i didn't have to really flinch i was able to make the purchase and do what i needed to do to increase the opportunities to bring more revenue into my business and i want business owners who watch this video to have that same opportunity i want you to be in a place where something comes along and you can say you know what think carlton in this video that i set up an opportunity account and i now have funds to capitalize on an opportunity that i never saw happening for myself but it all of a sudden showed up that day see this is what we can do to put ourselves in the best possible position to capitalize on opportunities let's take it upon ourselves to allocate 10 of our gross profits left over in our business and allocate those profits into our opportunity account all right now that we've gone over those four accounts that are important for you to have last important account to make sure that we have established as new business owners is our tax and accounting account having a tax and accounting account is really a peace of mind account for many business owners because when you're a business owner you're aware that you now have to track your own taxes but you don't know how much is actually going to end up having to go to uncle sam so rather than having to guess and wonder how much should i be setting aside for taxes most accountants will just tell business owners to set aside 30 percent i am reluctant to do that as an accountant because i'm a tax strategist it's my job to make sure i give you the exact amount you're actually supposed to be saving so you can use the other amounts inside of your business to continue to grow your business if that's something you see fit for yourself but if you're early on in business you may not have a tax strategist because it may not make sense to invest to hire a tax strategist early on so you might want to just establish yourself a tax and accounting account having a tax accounting account can allow for you to get into a habit of allocating 30 of your leftover gross wages into this account so you're prepared to pay your taxes come april 15th when you file your tax returns for your llc it's important to have this account because you might get into a place where you weren't managing your expenses correctly inside of your operational account so you really don't know how much you're going to owe in taxes and you ended up mis-budgeting your expenses because you spent more than you should have in your operational account and you didn't budget for taxes accordingly it happens all the time people think that just because they're spending money in their operational account that they're not going to have a tax liability that they think that just because they spent as much as they made that they're not going to have a tax liability it doesn't always end up exactly working out that way so i just want to make sure that you guys understand that it's important that you break down your expenses into the correct categories when you're doing your bookkeeping and that you establish the correct business checking accounts early on as a business owner getting started in business can be easy if you establish a hatch card it'll make things easier for you because you're getting cash back on some of the things that you're already spending your money on make sure you check out the link in bio and if you like this video i'd love for you to like comment subscribe so i can continue to make more of them for you i look forward to seeing you on the next one take care [Music] you

Channel: Karlton Dennis

Views: 108,062

Keywords: 5 BANK ACCOUNTS You Need For Your Small Business, understanding your deductions, taxes made simple, tax strategy, tax expert, karlton dennis, taxes made simple karlton dennis, deductions in taxes, tax deductions, tax planning, easy tax tips, tax tips, taxes made easy, taxes explained simply, 5 bank accounts, small business, llc, s corp, what bank accounts should I have, savings account, tax bank account, checking account

Id: HyCpzc1zY4M

Length: 9min 43sec (583 seconds)

Published: Fri Jul 23 2021