Business Checks vs. Personal Checks (2024)

No matter how blended the personal and professional can be, it shouldn’t extend to finances. So, even if your business is personal, your checks shouldn’t be. Business and personal checking accounts typically have different features tailored to their purposes. The same goes for business and personal checks. While these two types of checks both allow you to make purchases, where the money comes from and how it’s recorded can have a big impact on your life and business.

What is a business check?

Business checks are exactly what you’d think. They pull money from a business checking account rather than a personal checking account. It’s the paycheck you receive from your employer or the checks you issue to your employees, among other business expenses. A business checking account is a best practice for most businesses, including sole proprietors, partnerships, corporations and Limited Liability Companies (LLC).

Keeping separate accounts for your business and personal transactions creates clear financial boundaries that will make accounting, taxes and investing in your business easier. If you apply for a business loan, for example, you’ll need to provide financial information based on an established business account. Dedicated accounts for your personal and work lives, even for very small businesses, may seem like an added complication but could actually save you time, money and stress.

What is a personal check?

Personal checks pull money from a personal checking account that you use for normal, non-business expenses. It’s the large rent check you write every month or the $10 check you get in a birthday card. Personal checks are printed with an individual’s name and can be written to other individuals as well as businesses to pay for anything from groceries to doctor’s bills.

Main differences between business and personal checks

While these types of checks look slightly different, they’re distinguished mainly by how and why you use them. Here’s some basic characteristics of business checks versus personal checks.

Physical appearance.

Business checks are bigger than personal checks, which allows for a logo and more space in the memo, payee, signature and additional information sections.¹ Printing on business checks can be easier because of their size, though handwritten checks are just as legitimate.

Cost.

Business checks generally cost a little more than personal checks when you order them through your bank. However, you can shop around for lower prices at online check retailers or even stores like Costco.

Security.

Business checks may have more security features than personal checks, like holograms, watermarks, special ink and even chemically sensitive paper. Personal checks have some security features but generally fewer.²

Cashing.

It’s usually easier to cash a personal check than a business check. Most banks will cash a personal check even if you don’t have your account at that bank. However, you need to cash a business check at the bank that holds your business account. Some banks prefer not to cash business checks at all. Keep in mind that “cashing” is different than “depositing” a check.

When do you need to use a business check?

Use business checks for business-related expenses. Even if you’re a sole proprietor, there shouldn’t be much gray area between personal expenses and business expenses. As business owners can attest, the list can feel endless, but here are some potential business expenses:

• Payroll (including yourself)
• Marketing
• Insurance
• Supplies
• Rent
• Utilities
• Equipment
• Software
• Loan payments

When do you need to use a personal check?

The term “personal check” just means a check issued from your personal bank account. Personal checks can be used for most purchases you’d use a personal debit or credit card for. That includes most of life’s day-to-day expenses as well as large purchases like vacations, cars or homes.

Can you use business checks for personal use?

While it may be possible to use business checks for personal expenses (and vice versa), there are very good reasons not to. The person accepting your check won’t know that it’s a personal expense so won’t stop you, but you could put yourself and your business in a sticky situation. Here’s a few reasons to keep your personal and business finances separate.

Taxes.

Taxes can be frustrating even if you’re an exceptional bookkeeper. Sifting through all your purchases and expenses at the end of the year, trying to sort business from personal, will cost you time and maybe money. You’re also less likely to be audited if you can clearly account for all your income and purchases.

Protection.

Blending personal and business funds or using the company’s bank account for personal expenses are two factors that could persuade a court to hold you personally responsible for the company’s debts or any harm caused by the company.²

Credibility.

Business checks make your business look more professional and put together. When an employee, investor or service-provider receives a personal check, they may question the health and legitimacy of your business.

Check out your options

When it comes to managing your business and personal expenses, remember that you have options. There are plenty of resources, services and software out there to help you manage every detail of your finances, down to the check design. Happy checking!

1. "How are Business Checks Different than Personal Checks." https://www.techchecks.net/resources/how-are-business-checks-different-than-personal-checks. Accessed 23 Sep. 2022.
2. "Business Check vs. Personal Check - First Republic Bank." 22 Jun. 2022, https://www.firstrepublic.com/insights-education/business-vs-personal-checks. Accessed 23 Sep. 2022.