Business School 101
From Alamo Bookkeeping Associates
Ok, so now you have a small business started, maybe have big plans and you are concerned about getting a set of "books". So what exactly does that entail? Well it entails a lot of small things. First of all, you should NOT combine your personal expenses with your business expenses in the same bank account. Number one, it's hard to remember when you go back and look at your check register (if you bother to keep one), whether something you bought at the grocery store was for business or personal, unless it was obvious office supplies. There are a lot of things you can buy at a grocery store for an office or business, such as paper goods, cleaning supplies, water, snacks, etc.
So the best thing to do from the start is open a separate bank account at your bank or another one that is convenient to you. Many banks have free checking for small businesses. If you are a big business, then you will probably have to pay some fees due to the number of transactions you have. However if you are just starting out or plan to have a slow start you do not need anything other than a basic checking account, with maybe a debit card. Don't bother with the hard sell of your friendly banker, he will try to sell you top of the line with a nice monthly fee for them. You don't need that now. You can always upgrade later. However I definitely recommend that you ask for your check copies to be returned with your bank statements. It is a lot easier to get the copies with the original statements than to request them later.
The other reason you don't want to mix personal purchases with business ones is because if by some remote chance you get audited by the IRS (highly unlikely for a small start-up), or have to show your bank statements to somebody (think loans) you will be revealing everything that you purchase and maybe there is some stuff on there you don't want to show such as certain types of magazines, or other personal paraphernalia. Keep your private stuff off your business receipts.
Next: What else do I need to get my "books" started?