Why It Is Necessary to Keep Your Business Bank Account Separate From Your Personal Bank Account

Now a day there is a debatable issue regarding the bank accounts. When we talk about the finance and cash flow of our affairs, it comes to hear that we should maintain a separate bank account for our business instead of using our personal account for our business purposes. The points that I would like to discuss here is that why we need a separate business bank account for our work, commerce or related affairs? Is it prohibited to use your personal bank account or your business purposes? What are the draw backs for using the personal account for your business purposes? Here below we shall discuss these entire questions in detail but in short.

First of all I would like to clarify that this is not an essential to maintain a different business account for your work corporation. You can use your personal bank account for your business matters only if you are running a small scale business and you feel it convenient to use your personal bank account for your work matter.

When we start a business we utilize a specific amount that is of course provided by the owner, although the owner is the only person to whom all the finance of a business belongs to. But if we use the personal account of the owner for his racket affairs there will be a very confusing situation when we would be in need to reach the business revenues and expenses. We shall never be able to reach the exact figures of the business. It shall be very hard to identify the business expenses among the personal expenses of the owner. We shall never be able to reach out that either the entreprise or commerce is doing good figures, better or bad figures. But if it comes to partnership or corporate level business entities, it is a requirement by the IRS to maintain the separate business bank account for your business affairs so that the exact figures can be extracted for taxation purposes.

One more reason behind maintaining your best business bank account separated from personal account is the accounting concept which is known as "separate entity concept" which explains that the business and the business owner are two different bodies. This concept separates the responsibilities of a business from the responsibilities of the business owner. In this way if the business entity ever goes solvent only the business assets will be taken into consideration. So in such a situation the personal account of the owner will never be looked for raising the funds of a solvent business.

When we use to be in a business environment we use to practice specific circulation of funds. It is not necessary always to utilize the funds that only belong to the business. Sometimes the business goes out of funds. In such cases what should be done? Should the business go to the silent phase and wait for funds that the owner will generate in unexpected time limit? Can it be possible to stay out of market for a while jus for waiting for necessary funds? No, definitely this can't be happened. May be we shall never have a second chance to step in the business market. In such situation we take credit figures from banks and many other financial institutions to keep the business running smoothly. So the banks and financial intuitions provide loans to the business entities. For getting this facility it is highly recommended to have a business bank account.

Looking for a Real Christian Internet Business Opportunity

Recently I was searching on the Internet for an online Christian home based business. Needless to say, the search was somewhat disappointing simply because of the huge number of websites all claiming to offer the perfect solution to my home based business needs. Unfortunately, very few of the companies I researched were actually founded by Christians. Fewer still were built around Christian business standards and ethics. The majority of companies offering home based business opportunities were simply Christian home business owners looking for Christian customers. Sorry, that's not what I was looking for. Anyone can claim to be a Christian, just as easily as anyone can claim to be a true Christian business owner. I didn't want to become part of an online business opportunity unless it was truly a Christian-based business, founded by Christians, operating on Christian biblical principles, and an online business that would allow me to be my own boss.

If you search Google for "christian home based business" most of the top websites are not Christian businesses at all. Most are Christian business directories. That's fine if I were searching for a typical job working for a traditional business, or wanted to start a typical "bricks and mortar" business. But I was searching for a true home based business where I could work from home on a part-time or full-time basis. I like the idea of working from the comfort of my own home, around my own schedule, and without making a huge investment and all the risk that goes into operating a typical "bricks and mortar" business

So, if you're like me and wanting to start your own Christian home based business, let me share with you some things I've learned. There are a few ways you can start this kind of business, but only one is truly a home based business.

You can always find a particular product or service that would have a wide appeal to Christians, and then market your business through traditional marketing methods such as print or media advertising. Of course the most effective marketing tool is the Internet. But unless you really know how to tap into the power of the Internet, you're basically at a loss. Even if you build a website, it will quickly become lost among the millions of similar sites on the worldwide web. It's sort of like planting a tree in a rainforest. You need to learn all the unique ways of driving Internet traffic to your website.

The most effective online Christian business opportunity is one that not only offers products or services that appeal to everyone - including Christians - but which also provides you with a complete turn-key operation, and will then teach you everything you need to know about Internet marketing. It should also be affordable. It shouldn't cost you a small fortune to get started. The up-front costs of getting into a good Internet business can range from several hundred to upwards of two-thousand dollars or more. Usually, the more you pay, the more you get. Just make sure there are no additional hidden costs for services you must purchase at a later time. Any additional costs, if there are any, should be purely optional and should not have a negative impact on your businesses ability to attract customers if you chose to opt out of those additional services. Plus, a credible online business should allow you to generate a fairly steady income stream within a reasonable amount of time. No Internet business opportunity, Christian or otherwise, can promise immediate profits. If they do, there is usually a catch. But you should be able to start generating real profits within 4 to 6 months after you start - assuming you are putting in the time, and following through on all the training you need to be a success.

But what if you're not "computer literate?" What if you barely know how to log onto your computer and surf the Internet? Can you still have a successful Christian home based business online? It all depends if the business opportunity you choose offers a truly comprehensive training program. Of course, some online businesses provide services where they do all the work of marketing and talking to potential clients. But those services cost, and will very quickly eat into your profits.

If you really want to be successful in business, especially online, you need to be patient, and take the time to learn how to do it all yourself. That doesn't means you must always do it all by yourself. You just need to know how to effectively market your business and talk with potential clients. Once you've learned those skills then you can decide how much of your own time you want to spend doing those tasks yourself, and how many you may want to outsource to others. But the bottom line is you need to have a team of real professionals backing you up, and offering you the best and most up-to-date Internet marketing strategies as part of a comprehensive training program. You not only need to learn marketing methods and strategies that will require an investment of your own money, but also effective marketing methods and strategies that are absolutely free. Also, that training should be available to you 24/7. Beside scheduled online training seminars, you should have access to a complete library of online training courses offering expertise in all areas of Internet recruiting and marketing. And perhaps most important, make sure you also have customer support 24/7. You should be able to get issues resolved within 24 to 48 hours of the time you submit a request. You should also have access to a comprehensive knowledge base or question and answer library where you can find solutions to issues on your own.

The bottom line is simply this. To find the right online Christian business opportunity will require a lot of due diligence. You need to approach the whole process objectively. That means look past all the fluff and all the glitz and glamour of claims, and thoroughly examine the basics of the business. Does it offer products and services that have a wide appeal to people searching for an online business? Does it offer a turn-key setup that will put you into business right away? Does it allow you to get into business without a huge expense? Does it provide you with a comprehensive training program so you can truly learn all the ins and outs of Internet marketing? Does it offer a 24/7 customer support and a thorough knowledge base or Q&A library? And perhaps most important of all, is it really a Christian business? Was it founded by Christians, and does it operate on sound biblical Christian principles of truth, honesty, fairness, and the Golden Rule of doing unto others as you would have others do unto you?

Business Creditworthiness

Criteria for Business Creditworthiness

Creditworthiness is probably the single most decisive factor whether companies will lend, increase line of credit, or sell to a business. Creditworthiness is not only based on your company's business reputation but also the company's overall financial strength. Banks, suppliers, and others who provide credit for your business, will examine the business credit report to determine the company's creditworthiness.

Your company's creditworthiness depends on 4 basic criteria,

Financial strength

Character Traits of the business

Economic environment

Financial Strength

The financial strength of the business is one of the most important variables to infer creditworthiness as it measures whether the company has the financial resources to repay its creditors. Fundamentally, it is the financial resources available to the business, which could be in the form of cash, funds from debt or investment. Business capital can be in the form of short or long-term. Short term Working Capital is the measurement of the availability of liquid assets of a company has to fund its day-to-day obligations, such as,

Repayment of interest on loan

Bill payments to suppliers

Employee salaries

Tax liabilities

These are elements in the business cycle that can quickly absorb cash. If working capital dips too low, a business risks running out of cash. The availability of a bank credit line is often used to smooth out peaks and valleys of a business cycle.

Long-term capital is usually a loan obligation with maturity date that is more than 1 year. When utilize properly, a company can optimize the use of the borrowed money to finance long-term investments and use the earned profit to pay for the interest of the borrowed money.

Lenders also calculate specific financial ratios to determine where the business stands within the industry and in comparison to other businesses that are similar in size. This portion of the credit business report closely examines the financial statements for items such as; working capital, debt to equity, cash flow and net worth.

Character Traits of the Business

Lending institutions compose an evaluation on whether the business has the management ethics to stand behind its business transactions. Character in business consists not only of ethical attitudes (such traits as high moral values, diligence, determination, confidence, perseverance, responsibility, resourcefulness, trustworthiness, efficiency, and respect), but also the company's credit history and other operational traits.

Business character is frequently determined by analyzing the credit history or credit score of the business. To acquire a business FICO score a business will require at least 4 trade references. Factors affecting a business credit score include:

Timeliness of payments

Unpaid accounts

Outstanding debt

Available credit

Although credit history is major factor, there are other factors used to judge business character and they include:

Owner's know-how and experience

Structure of business

Size of business

Years in operation

Economic Environment

The economic environment surrounding the business will have external events that can affect the operations of a business. These circumstances are all examined by the lending institution to determine creditworthiness. These external factors will include the overall economy, growth within the industry, government regulatory changes and more.

The business credit score is used by creditors to establish the risk versus reward of granting a business credit, and is also used to establish the interest rate on loans and business lines of credit. As the business credit report affects the operations of the business, it is within your best interests to build an excellent credit rating.

As it is with the individual credit scores, it is important to review your business credit profiles from credit bureaus at least once or twice a year. Make sure the information is accurate. Upon finding errors, contact the appropriate bureau and report the errors immediately with proper documentation.