When you set up a business, it is a critical task for an owner to open a separate bank account. Having a business bank account is crucial for any enterprise because this is the best way to keep track of your finances. This is regardless of whether you are a sole proprietor or with a partner. Aside from that, separating your personal and professional finances can help make everyday transactions easy to document. In the end, you’ll be able to manage your finances more effectively for the betterment of your company.
Take a look at this guide that can help you set up a business bank account for your new venture.
The Right Bank
Choosing the right bank for your business account is another crucial task. This is because you will want to work with a company that understands your needs as a business, not as a consumer. For example, some banks may be best for small entities, while others are able to cater for multinational corporations. Keep in mind that personal and business savings accounts are different in terms of the services offered. In addition to checking accounts, you might want to look into a bank that offers lines of credit and cash management services to save you time and effort. Be wary though of bankers that might persuade you into taking advantage of services that are not actually useful to you. In other words, be sure to do research before you sign anything.
If you search enough, you’ll find banks that actually offer no charges for opening business checking accounts, but will require a minimum balance and/or have limited number of transactions. Once your business grows, you might have to change to another type of bank account. Although there may be charges, you will benefit from being able to handle more transactions efficiently and have access to other important bank services, offsetting the cost in the long run. When applying for a business bank account, always keep the total cost of balance requirements and charges in mind.
The requirements for opening a business account may vary from bank to bank. But the minimum requirements would be a tax ID, social security number as well as articles of incorporation and certificate of good standing with the state for corporations.