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Adubeasy
11-22-2009, 04:20 PM
Hello, I have read on the forums and learned in the lawn school about getting a DBA which gives you a certificate to open a commercial bank acount. well someone told me that its not a good idea to have a commercial bank acount, because if things go sour that money is the business's money and it can be taken. i have a few questions.
1) The money that goes in to the commercial bank account?

2) is the money in the commercial bank account the owners? can the Owner take it out, for whatever reason he/she wants to?

3) Instead of Using a COmmercial bank account are we able to use our own bank account. why should or shouldent we?

People, i would like to know what you have to say on this. what is the best thing to do in this situation. please explain why. thx 4 the replies-Andrew

Adubeasy
11-22-2009, 04:46 PM
merge the first question with the first part of question number 2 and you got my first question, sorry about that.

Steve
11-22-2009, 05:02 PM
Hi Andrew,

Here is my take on it.

Say you want to start your lawn care business and call it Andrew Smith Lawn Care and your name is Andrew Smith. If you tell your customers to make the checks payable to Andrew Smith, you can then deposit them in your personal bank account.

If you want to call your business Super Green Lawn Care, you will have to register a DBA (Doing Business As) at your county court house. Then you take the paper you get from the county, to the bank and open a commercial bank account under that name. You can then have checks made out to Super Green Lawn Care.

1) The money that goes in to the commercial bank account?

If you deposit money into your commercial account, yes the money goes into your commercial bank account.

2) is the money in the commercial bank account the owners? can the Owner take it out, for whatever reason he/she wants to?

Yes it is the owners and you can do whatever you want with it.

3) Instead of Using a COmmercial bank account are we able to use our own bank account. why should or shouldent we?

You can use your own account or a commercial account. It all depends on what you want to call your business.

well someone told me that its not a good idea to have a commercial bank acount, because if things go sour that money is the business's money and it can be taken.

I am guessing by 'if things go sour' you mean a lawsuit? If you get sued and you don't have insurance, your money and your property can be taken. It won't matter where you put it.

Does this help?

The Cleaning Doctor
11-23-2009, 12:26 AM
For book keeping and tax purposes you MUST have separate accounts incase of an audit. Everything goes into the account and then paid out of this account including yourself. You write yourself a payroll check. Don't use it to go buy groceries.

AllProlawn
11-24-2009, 09:56 PM
I have 3 accounts 1 checking and 2 savings
the first saving acountt is for emergency for the truck and equitment
for repairs and tires or wht ever it needs it has 3000.00 in it
th second savingiss acount is for taxes got to pay uncle sam
i put 50 bucks a week in it to pay my 1/4 ly taxes
my checking acount when im not doing any thing in the winter
serves as my pay role i take out a pay check every 2 weeks
make sure u have a enough in there for the slow months
to cover your comany exp. Phone Ect.

Steve
11-24-2009, 10:19 PM
What do you feel are the benefits of having 3 accounts like that versus just one? I am guessing over time you found this to work best for you? Why so? I am sure others might find themselves in a situation you had found yourself in the past, when it comes to book keeping.

AllProlawn
11-27-2009, 02:35 AM
What do you feel are the benefits of having 3 accounts like that versus just one? I am guessing over time you found this to work best for you? Why so? I am sure others might find themselves in a situation you had found yourself in the past, when it comes to book keeping.

Steve when i first got in to this i got some advice from dave ramsey
a money counslor the dave ramesy show he gave me some ideas
and i applied them to our house hold this was before i had the lawn care company .
he said to have 3 envlopes 1 house payment/rent 2 food 3 utiltys
you put money in them every time you get paid and at the end of the
month you pay all of your living exp. first then what was left over is for other bills and entertainment and was on a strict budget this helped out a lot we had money at the end of the month

same deal hear evy body got to pay taxes and you do have repairs
and stuff ihave talked to some other guys tin the biz and they just struggel
when it comes to tax time becuse they do and dont plan on that stuff
last mike used his credit card to pay his taxes i got money back
when colorado was in a drought and i was not mowing as much and hurting for money my truck went down i need a new tranny 2800.00
i had a grand in my checking account and it was the middel of the month so i pulled the money out of my savings account to pay for it it was nice to have in there.
Dave ramesy says u should save 3 to 6 months living expences for pepole u have jobs and guys like us should have a year of it
now i really dont have to worry becuse i have that
i got my bills paid for the winter months and still be able to
sit back and relax for the holidays and i like that
the other thing is when i get my payrol check it has the taxes
taken out just like a reguler job
so know your expences to run your company and house hold and build up from there
and uncle sam wants a paper trail and i have that to in black and white lol

Steve
11-27-2009, 01:34 PM
For those that don't use this system, where does the money go do you feel? Is it just spent on un-needed crap?

Does this system force you to not be frivolous with your spending?

Ultimate if you were making the same money before you did this as you were after you implemented this system, then it seems to all come down to having to control your spending.

Do you think that most business owners simply don't control their spending like they should?

Also do you feel this system should only be used for the newer lawn care business owner or is it a good thing for everyone to use?