Many business owners can get by without opening a business bank account, at least initially.
However, as your business expands and transactions increase, it’s a good idea to open an account dedicated to your business.
Some good reasons to have a business bank account include:
Unfortunately, if your company ever gets sued, the courts can deem your personal savings part of the company’s finances, even if you did not earn that money through the company.
Having a separate bank account protects you as an individual from having your personal savings be at risk should a lawsuit against the company ever emerge.
When it comes time to file your taxes, life will be much easier if you are able to see your sales and expenditures related to your business without your personal transactions mixed in.
Should you ever get audited by the IRS, you will have a clear record of your transactions to reference.
To make your business accessible to the most paying customers, you’re going to need to accept credit card payments.
Credit card processors are not able to use personal bank accounts to process transactions so a business account is necessary to offer this feature.
Having a business bank account demonstrates professionalism and gives your company legitimacy.
You will most likely have a business debit and/or credit card with your company name on it, and you’ll be able to write checks in your company’s name instead of in your own name.
Anytime you process payments with a customer, your business name will appear on their credit card statements, legitimizing the transaction as a real business.
Before you set up an account, you may want to shop around to different banks and see what features they can offer for business bank accounts. You may want a bank that has a local branch and ATMs you can easily access.
Many banks offer free accounts, however, some charge fees unless you maintain a minimum balance in the account. Also, be sure to inquire about any transaction limits or fees.
Once you have settled on a bank, you will need to gather your documents in order to apply.
Items you will need:
The institution you choose may have its own requirements, so be sure to contact the bank and find out what is required before you head out the door.
The good news is that once you set up your business bank account, you won’t need to do it ever again, hopefully.
Take the time to carefully research your options and select banking and payment processing partners that you can trust. This will help you avoid the headache of changing anything once you have an established business and keep your business running smoothly.
« Back to Glossary IndexSed ut ullamcorper nulla, eu consequat turpis. Duis ac molestie orci. Suspendisse blandit ullamcorper eros
CTA Button