Starting a small business is an exciting time for any business owner. It’s also a period that involves a lot of work setting up the business with the right resources, tools, and service partners to enable its operations and financial success.
For most small businesses, a dedicated bank account is essential. Even if you’ve been managing your business finances out of your own personal bank account, a small business account is necessary to keep your accounting clean, track your spending, support your customers and employees, and simplify the tax payment process.
Read on for tips to make sure you choose the right small business account for your needs.
What Fees Are Charged by the Account?
Fees are always a top consideration when choosing a bank account, whether personal or business. But business bank accounts can be particularly important because fees can bleed away your profits—and some banks may charge fees on essential services that your business relies on.
If you’re a business that regularly receives wire payments, for example, you might look for a bank account that offers fee-free wires—even if that bank account charges a monthly fee. A flat fee for an account offering fee-free wires can reduce your banking expenses, although you should also consider other services and fees to make sure you aren’t opening yourself up to unnecessary costs in the long run (such as a monthly account fee for not maintaining a high minimum balance).
Similarly, pay attention to the fees charged for failing to meet minimum account balances or for exceeding a set threshold for monthly payments or withdrawals. Choose a bank account that fits how you plan to use that account. A bank representative may also be able to help you determine the best account for your needs.
What Services Do You Need from Your Bank Account?
Banks will vary in the types of services and other features each business bank account will offer. Again, these services need to be evaluated carefully to make sure you choose a bank account that does everything you need.
For example, do you need multiple card holders for the account? Are you interested in a business credit card? Do you want a bank account that integrates easily with your accounting software? What about services like online banking and bill pay?
If you choose a bank account that offers restricted services, you won’t be able to enjoy the full functionality of a business bank account—which could hurt not only you but also your customers. In some cases, you may value the customer service and ease of use offered by certain bank accounts or banking features, even if those features carry an added cost.
Where Do You Do Your Personal Banking?
Though it isn’t necessary to do your personal and business banking at the same place, there are benefits to this approach. Not only does it keep your accounts easier to organize and reduce your time spent traveling to and from the bank, but it can also facilitate faster and smoother transfers of money to and from your personal and business accounts.
There is also potentially the benefit of knowing and trusting the customer experience you receive at your existing bank. If you’re an existing personal banking customer and you want to expand your banking relationship by opening a business account, you might be able to leverage your strong history as a customer to access certain services and features—such as a business credit card—that another bank might not be as willing to offer.
Or, if you’re currently unhappy with your personal bank, opening a new business bank account elsewhere is a perfect opportunity to transition out of that relationship.
When you own and operate a small business, your vendors, partners, and other business relationships affect how efficiently you’re able to run your business and serve your customers. Your bank of choice can play a big role in enabling this success and growing your company from the ground up.
Want more info on the benefits of small business checking accounts, or ready to open a new small business checking account? Contact our Business Services team today.