Set Up the Money
Why You Need a Business Bank Account (Even as a Sole Prop)
Short answer
Open a dedicated business checking account on day one — even as a sole prop. Mixing funds ('commingling') destroys LLC liability protection, wastes hours at tax time, and makes it impossible to see your actual profit. Most banks open one in 20 minutes with your EIN and ID.
This single move separates owners who stay small from owners who scale. It is the cheapest, highest-leverage step in starting a business.
What to bring to open the account
- EIN confirmation letter (CP 575) from the IRS
- LLC formation documents (or DBA filing for sole prop)
- Government-issued photo ID
- Initial deposit (often $0–$100)
- Business address and phone
What to look for
- No monthly maintenance fee, or a fee waivable with a low balance.
- Free incoming ACH and wires. Outgoing fees should be transparent.
- Mobile check deposit with a daily limit that fits your largest payments.
- Easy integration with invoicing software for transaction sync.
- A real branch or strong support — you'll need it eventually.
Frequently asked questions
Do I really need this as a sole prop?
Yes. Even without an LLC, separate accounts cut bookkeeping time in half and make audits painless. The IRS expects 'regular, separate, and consistent' business banking.
Invoice from day one.
Glo Invoice is free for 14 days for new owners — your first invoice goes out in under 60 seconds.
Sources & further reading
Primary sources we consulted when writing and reviewing this guide.