This month, we’ve been making some decent progress getting all the legal aspects of our businesses set up. Not exactly fun stuff, I’ll admit, but necessary. Friday we’ll be seeing an attorney who specializes in small businesses. Hopefully he’ll be able to answer the questions we have and help us get all the legal aspects finalized. One of the next things on our to-do list is to open our business checking accounts. When you’ve established a business, it’s important to keep your business and personal finances separated. It just makes good business sense – for bookkeeping and legal purposes. You can file all your LLC paperwork correctly, but you need to actually operate your business as a business in order to ensure the legal protections (like limited liability) that creating an LLC can provide.

As you know, we’ve been studying the courses at Internet Business Mastery Academy and using their step-by-step instructions for launching our internet businesses. Of course, we can’t pass along all the information we’re learning there, because it wouldn’t be fair to Sterling and Jay, who have put a lot of time and effort into creating the Academy. With that said, once in a while, we learn something at the Academy that’s just too important not to share with you. In a recent course, Sterling and Jay shared a really good tip for further protecting your business funds. Whether you’re going to formally establish a business, or go the more informal route – if you’re doing business on the internet, this is an easy but essential step you should take to protect your money. And because it’s so important, we wanted to pass this tip on to you…

My Bank Account Was Hijacked…It Could Happen to You, Too!

A few months ago, I was going through my usual routine of paying my bills online. When I printed out my bank statement, I noticed something not so routine. A charge for a mail-order bride company based in Hawaii. Hmm. Now, I do a lot of online shopping, but I’m pretty sure I would have remembered that purchase. I checked the linen closet…nope, not even one Hawaiian chick in there. So, of course, when Scott got home from work I had to ask if there was anything he needed to tell me about. And fortunately, he was just as clueless as I was. I decided to call the bank first thing in the morning. When I woke up the next morning the first thing I did was log onto my bank’s website and check my account. Overnight, there had been two more purchases – this time from a very expensive retail clothing store. I called the store immediately and found that my bank account information had been used to buy two dresses for hundreds of dollars. This was going to be a very well-clothed mail-order bride! I had reached the store in time to reverse the charges. Then, I had to deal with the bank. To make a long story short, I ended up having to close my account and open a new one and I did eventually recover all the money that was charged against my account.

The moral of this story? Don’t buy your girls from Hawaii, they’re really high-maintenance. More importantly, if you put your financial information out there in cyberspace, you should take steps to protect it from hijackers. Imagine if this had been a business account and all my profits had been sitting there exposed and available for the taking? Well, thanks to the Academy I now know how to prevent that situation.

Make Your Business Funds Invisible With a Second Account

This tip is particularly useful for setting up your business bank account. But, keeping in mind my personal experience, you may also want to consider using this set-up for your personal accounts.

You’ll be making all your business transactions from your business account. You’ll be paying your business expenses, making purchases, and of course collecting boocoodles of money from your customers on a regular basis. If it’s an internet business, the majority of these transactions will of course, be online transactions. If you put your financial info out there – your bank account routing number, account number, debit card number, etc. there is always a risk of that information being hijacked. Welcome to ecommerce. The trick is not to have all your funds attached to that bank account. For this, you need to set up two accounts that you have easy access to and that you can transfer funds between easily.

Account Number 1: This is your “public” account. If you ever have to give out your bank account information to make a purchase, pay a bill, or accept a payment, use this account. If anyone ever hijacked your account, it would be this one.

Account Number 2: This is your invisible account. Never give out the information from this account, and never use this account for public transactions. The fact that this account exists will be a little secret between you and your banker. If it ever gets hijacked, you should have a long talk with your banking institution!

You should keep enough money in your public account to cover all your routine business expenses – especially if there are charges you have set up to automatically draft from your account each month. If you need to make a large purchase, transfer the money from your invisible account into your public account. Always make the purchase from the public account.

As the profits roll in (into your public account), transfer the surplus to your invisible account on a regular basis to keep your money protected.

Any way you look at it, dealing with a hijacked bank account ranks right up there with having a boil lanced. But, if you take this extra step to protect your funds, you won’t be at risk of losing it all. From my experience, recovering your hijacked funds is possible, but it can be a long and frustrating process. With two accounts, even if someone stole every penny from your public account, the majority of your profits would be protected in your hidden account So, while you’re sorting it all out with the bank, you’d still have money to pay the bills and put food on the table. And buy a nice new dress for your mail order bride, if that’s your thing.

We can’t spill ALL the beans. But you can get more tips, information, advice, and step-by-step instructions for starting your online business from Internet Business Mastery Academy. Click this ad for a free audio course – it’s a good intro to the Academy. If you decide to join, please consider using one of our affiliate links on this page so we get credit for referring you. Thanks!