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What can you purchase with a business account?

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    Quick insights

    • You can use a business bank account to pay for any business-related expenses, like payroll, office rent and IT equipment.
    • You’ll generally need to use your federal tax ID, in addition to some other personal details, to open a business account.
    • Avoiding using your business account for personal expenses can help keep business expenses organized.

    New small business owners may use their personal bank account for business transactions. However, this can become increasingly difficult as a business grows and adds employees.

    Even solopreneurs or businesses of one can benefit from using a business bank account. Using a business account for business purchases can be a helpful way to track business expenses and earn rewards on everyday purchases.

    Learn why a business account can be beneficial, what you can purchase with a business account and why it can be important to separate business and personal expenses.

    How business bank accounts work

    Many business accounts include a checking account, savings account and credit card account—very similar to personal bank accounts.

    To open a business bank account, you’ll generally need to submit the following information:

    • Federal tax ID (either an employee identification number or social security number)
    • Business formation documents
    • Ownership agreements
    • Business license
    • Business details (including name, address and business type)

    Benefits of a business bank account

    Opening a business bank account can be an important step for any sole proprietor or small business owner. Business bank accounts may provide a range of benefits for business owners, including:

    Tracking business expenses

    Regardless of your business’ size, it may benefit from having organized financial records. Tracking business expenses allows business owners to monitor overall spending, identify opportunities to cut redundant costs and create a data-backed budget.

    Separating business and personal finances

    Opening a business bank account allows business owners to separate their personal and business finances. While it’s not illegal to use your business account for personal purchases, it’s typically recommended to avoid this process.

    For starters, making personal purchases on a business account may violate your account’s terms—which may result in fines or the closure of your account.

    Business bank accounts and credit cards

    Depending on your credit card issuer, you may be able to open a business credit card that links to your business bank account. This process can differ between credit card issuers. Using a business credit card can be helpful in organizing finances and earning rewards to reinvest in your business.

    Many business credit cards allow cardmembers to earn rewards points, airline miles and cash back on business purchases. For example, each Chase Ink business credit card offers different accelerated earning categories, so the right card could depend on your business priorities.

    Tend to spend the most on shipping costs? The Ink Business Preferred® credit card allows cardmembers to earn 3X points on select categories. Or, if you prefer more consistent cash back, the Ink Business Unlimited® credit card offers unlimited 1.5% cash back rewards on every business purchase.

    What to use a business bank account for

    Business expenses are costs directly related to the operation of your business. A few common examples of business expenses include:

    • Business supplies and equipment
    • Travel
    • Lodging
    • Vehicle expenses and mileage
    • Client retention efforts
    • Marketing and advertising expenses
    • Legal expenses
    • Payroll costs
    • Employee benefits
    • Office rent or mortgage
    • Moving expenses
    • Utilities
    • Postage/shipping
    • Phone
    • Internet
    • Continuing education
    • Software

    Can I use my business bank account for personal purchases?

    In general, it’s best to avoid using your business account for personal purchases to maintain clear financial records. In other words, each purchase should be a legitimate business expense.

    If you are new to managing business expenses, it may be wise to consult with an accountant or tax advisor.

    In summary

    Business bank accounts and credit cards offer entrepreneurs and business owners an organized way to manage their finances and support their business growth. By understanding how your business account and credit card work, you can maximize their benefits to reinvest in your business.

    Learn more about Chase business banking and credit card options that may be able to help propel your business forward.

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