You have a small business and you have invested everything; your time, your energy and your money. With life and work so intertwined, it might seem natural to use your personal checking account for business purposes.

Business checking accounts are usually more expensive than personal accounts and frequently require larger minimum balances with fewer features. Many startup business owners therefore gravitate to a personal account. This could be problematic down the road.

Small business owners who use personal accounts for business purposes may end up causing other problems that will cost more in the long run. This action could end up driving accounting costs much higher and risk your personal financial life with your business life. It is best that small business owners avoid combining personal and business finances. Here's why:

Good deals on business checking are out there.

Personal checking accounts may have lower minimum balance requirements, but building a relationship with your bank can get you discounts or deals on a business account. For example, sometimes banks will allow you to link accounts. This could let you combine the sum of your business and personal accounts to meet minimum balance requirements and eliminate fees.

Also, you may be able to cut costs by forgoing bells and whistles found on personal accounts that your business doesn't need. Many banks offer a selection of small business accounts that have different features tailored to the owner's needs, from management to bill paying and merchant services.

Billing is easier with a business account.

Personal checking accounts also don't allow you to connect payment services so you can accept credit and debit card payments along with cash and checks. The cards then must be processed by an outside resource, adding time to the final transaction when you get to see your money.

Loan procurement is easier.

Most businesses will find a need for extra funds from time to time. Owners who mix personal and business finances have a more difficult time getting an accurate view of cash flow and producing income statements. This can reduce their chances of securing a business loan. A small business using a small business checking account will have much cleaner books and records, so lenders are less likely to offer financing to a small business owner using a personal account.

Tax time could be a disaster.

At tax time, using a personal account for business can spell trouble at tax time. When you need to prove that expenses or income were directly related to business, your business account is an excellent record. If the IRS decides to audit your business, brace yourself for a huge accounting nightmare if you are using a personal account for business. Unclear record keeping may lead to your income being overstated. The IRS will have you paying taxes on that overstated income.

There are good options out there. Check with your existing bank and don't forget the small local banks and credit unions. Many will offer you good service at low rates and they want your business. Remember to shop local, the big banks may not be able to offer the same deal you can get with your local bank or Credit union.

The key concept is to know your risks of personal and business finances including the elements that go with them. When in doubt seek professional assistance.