Opening a Business Bank Account
If you are starting your own business, you need to keep track and put your money somewhere. The most logical way to do this is to find a bank for your business. When looking to open up an account, there are a few things you should keep in mind. Here six common mistakes you should avoid.
Choosing the Wrong Bank
Many businesses will not do their research before choosing a bank to go with. They often pick the same place they go for personal banking needs. Business banking is quite different than owning a personal account though, and each bank has different policies and procedures they offer for businesses. Make sure you do research before choosing one.
Not Having all the Information
Setting up your business account could take some time, so you should be sure to schedule an appointment. When making the appointment though, be sure to find out the exact documents you need to bring. It will be a waste of time if you go to the bank and are unable to complete your account because you don’t have what you need.
Going Below Your Balance
Some banks will require you to set a certain monetary amount that must remain in your business account. If you go under the allowed limit, your business could face unnecessary fees because you did not follow policy. The best way to remember to stay above the amount is to set it a little higher in your business’s personal spending plans.
Not Listing Allowed Signatures
When you go to open your account, you will need to determine the specifics of check signing. If you have a partner, determine whether or not both of you will need to sign checks. You should also consider which checks need to be signed by whom. Figuring these things out at the beginning can keep your business banking headaches to a minimum.
Ordering Unusable Checks
Although there is a lot of money transactions that are handled electronically, you should order checks for your business as you never know when you might need them. Businesses often order incorrect checks though because they do no put the right information on them. The legal business name must be used for the check to be valid.
Tying Accounts Together
Small and first-time business owners often will not see the importance of separating business accounts. They merge their personal and business banking transactions and accounts. This could result in major tax problems and legal issues. The best way to stay away from those is to separate your accounts from the very beginning.
These tips are to help you set your account up faster and better. Doing these from the start of opening can help save you some headaches and issues later on.
