Business banking is different than personal banking. And business banking accounts can vary widely from one bank to another. Even though you have a great relationship with one bank for your personal accounts, that institution might not be the right fit for your business accounts.
To find the best account for your business banking needs, research different options so you understand the features that are available and can select the best fit.
Here are common business banking mistakes to avoid as a small business owner, starting with finding the right account.
Account Features To Look For
You can save money on fees by choosing a bank that offers products without monthly account fees. Look for a bank that is flexible and can grow with your business needs.
After identifying those qualifiers, find an institution with an online banking platform that is convenient, secure and has the features you need. This platform should be easy to navigate and include an app version for your mobile phone.
If you find a bank that has a single business checking or savings account offering, it will make life even simpler for you.
Check Your Signing Authorities
Small business owners have a lot on their minds. So, it’s not uncommon for them to overlook setting up check signing authorities in advance.
If you have a partner, or employees, you most likely want your business checks to require two signatures. If you want this, you’ll need to decide whether the double signature is required for every check or just for checks above a specific amount.
If you don’t do this right away when setting up an account, you’ll have to do it later, which can be a hassle.
Ordering Incorrect Checks
Ordering checks displaying correct account information is vital. But often, this is overlooked.
Most commonly, a business owner will order new checks but request the wrong company name on them. More often, their trading name or DBA (doing business as) is on the check instead of the business’s legal name.
If you want to accept online credit card payments, this can really cause issues. Many credit card processors will ask for a voided business check and they need the business’s legal name to match the name on the check. This helps verify that the business is indeed a standing business and removes the risk of online fraud.
Maintaining A Monthly Minimum Balance
If your bank offers the perk of no monthly fees, most of the time you’ll need to maintain the required minimum monthly balance. Not every bank requires this of course.
If your bank requires a monthly minimum balance, you may accrue monthly charges. Keep your balance slightly above the minimum amount so that if it falls due to unforeseen expenses or lower revenue, you won’t be charged any fees.
Separate Your Personal And Business Accounts
Setting up a separate business banking account from the beginning of business ownership is a must.
When you start a new relationship with a bank, you’re opening the door for more financing opportunities down the road. Not only will you be able to start a relationship, but you can nurture it to create the possibility for a business loan, commercial real estate financing or equipment financing in the future.
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