Lean and fast: Business Bank Account

Banking your business: this is how you do it

Once establishing a business, you should, as the business's owner, set up a bank account for your business. The monthly fees for this account vary from bank to bank, some offering free accounts with the stipulation that qualified purchases are made every month and that a specified balance requirement is met.

pros and cons of a simple checking account

A simple checking account is certainly an alternative to a business account; however, by choosing that option, you could miss out on important consulting from the bank as well as certain perks just for business owners, i.e. online services, multiple business or personal  checking accounts. And although you most likely will not earn interest in your business account, it will help you establish credit for your business.  

Keep your personal and business accounts separate 

It is very beneficial and recommended that you keep your personal and business accounts separate – this is part of having a business identity and is required by the IRS. This will assist you when completing your monthly bookkeeping, so that you will have a quick overview of which incomes and expenses or deposits and withdraws are personal and which are business related. Especially in the initial phases of starting a business, it is important is ensuring that you do not live beyond your means.

Not every bank supports all types of businesses structures

At the moment, business accounts are available at almost every bank, although not every bank will support all types of businesses structures. Many credit unions will offer business accounts, typically at lower rates than commercial banks and in some states, you are not required to be an employer or a member of an organization to join; you merely have to be a resident of that state.   

Fee or not to fee

When comparing financial institutions, to determine where you would like to open an account, be sure to look at the fees tied to the account and do not forget to include the costs of checks and endorsement stamps. Some banks may offer low or no fees, but will then apply high fees to the first set of checks or endorsement stamps.

Once you have opened your account, you may want to consider applying for a credit card in your business's name. The annual fees coupled with a credit card will vary from bank to bank and may range from being free to over $100. A business credit card can help you when you are short on funds and need equipment, software or inventory.

Seek for advice & assistance

Establishing and developing a working relationship with your business banking partner is a valuable aspect when starting a business as it will allow you to have a source of advice and assistance if issues may arise in the beginning phases. This relationship will also come in handy when seeking a business loan.