The Importance of a “Business” Bank Account

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I used to wonder: why pay for a business bank account when we can use a free personal checking account for our business activity?

Answer: Control of your security.

I could give you stats on how often bookkeepers steal/embezzle from their clients and employers. I might point out that former contractors and employees of your bookkeeping agent may have decided to, y’know, remember a few things they learned on the job. Creepy… Right? Let’s just say that if the accounts are light and the reconciliations have discrepancies…the crime took place in the coffee shop, the weapon was a laptop, and the bookkeeper did it. Probably. We need clues.

A business bank account allows the business owner to invite an accountant/bookkeeper user to the accounts. To accept the invite, the bookkeeper must create their own log-in and password for access. Personal accounts do not have this option. Here’s what you pay for:

  1. The ultimate clue maker: audit tracking.
    Audit trails are permanent user footprints recorded in real-time. Audit trail capture is designed so that it can’t be ‘fixed’. Not even by the bank, itself. Your footprints are tracked every time you log into your accounts. If the bookkeeper is using YOUR credentials to obtain transaction information/ bill payments/download statements for reconciliation, then the audit trail reports that YOU did it. If the bookkeeper then transfers themselves a smallish bonus or makes a payment on their personal credit card via your ‘personal’ account used for business, the audit trail reports that YOU did it. The audit trail stands in court. You take the fall. It hurts.
  2. You have ‘control’ and the bookkeeper has ‘permissions’.
    When you invite the bookkeeper in as a user, you also click ‘permissions’ boxes. You can permit the bookkeeper.

    1. Access to some accounts and not all accounts.
    2. To only view transactions, cleared checks, and statements.
    3. To only pay bills or make transfers. With this, the audit trail identifies who executed the transactions.
    4. You can divide permissions: One bookkeeper staff member is permitted management of accounts payable, only. The other staff member is permitted to view transactions and statements for reconciliation.
    5. You can revoke/change permissions at your will.
  3. You can delete users on a whim.
    If you wake up in the middle of the night with a question of your bookkeeper’s integrity, you can delete them that instant.  Change of heart?  Invite them back the next day. Do you suffer bouts of paranoia or insecurity? Okay…you may be crazy.  Your accounts belong to you. Be crazy

Does your bookkeeper use your passwords to your accounts? Are they kept in something like “Last Pass” or other password keepers? Who owns the ‘Last Pass’ or password keeper subscription? What’s going on?

When a bookkeeper executes a bad decision, explanations may matter to your heart and mind, but, it probably won’t excuse the outcome in your bank accounts.

Finally, it is my belief that when security is in place, the nefarious bad actors skip your business like the burglar skips your house because of your barking dogs. It costs less time and money to keep them out than to catch them. When it comes to the running of your small business, being the micromanager of your accounts is your right and responsibility. Don’t let any whiny brat or bully shame, guilt, charm or dodge you into NOT asking questions about YOUR accounts. Okay? Okay.

What now?
Change your passwords.
Call your bookkeeper
Send the invites
Discuss and assign permissions
Sleep well

Let’s win this.

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Karen Ault, EA
Tax Consultant, Accountant, Quickbooks Pro Adviser

Karen is an Enrolled Agent (EA) which means she is authorized by the U.S. Dept. of Treasury to represent taxpayers, business entities, and estates before the IRS in tax preparation, audits, collections, and appeals. 

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