Opening a bank account for your startup legitimizes your business; allows you to pay employees; make financial transactions; transfer funds; receive payments and accurately keep track of business expenses and budget.
To open a new business bank account there are a few important steps:
Choose the Correct Business Bank Account for Startups
It is important to consult your accountant to determine what kind of business bank account you need. You may be advised to open multiple accounts depending on the complexity of your finances. It is possible to open separate accounts for the same business each dealing with a different function like payroll, taxes and income. Having separate accounts for different financial practices can be a workable solution.
Select the Right Bank for your New Business Bank Account
Not all banks suit all businesses. Even though you might have a good relationship with your personal bank you might need a different bank for your business. Businesses require a bank that has excellent service options related to commerce and a staff of professional experts that can advise you in your business finances. You will need a bank that can provide your business with a line of credit; reasonable banking fees and maybe cash management and a balance transfer credit card. Find a bank that is a good fit for your particular industry. Compare your options and consider banks that will allow you to open your business account online. You should be aware that businesses in some industries like telemarketing, gambling and money services will need to visit the bank in person in order to open a new account.
Before opening a new business bank account get your papers in order. Know the bank’s requirements so that you bring with you all the relevant documents. This will save a lot of time and frustration. Each bank has specific policies and each kind of account has specific documents that are required during the opening process. You are likely to need a social security number if you are the sole business owner; a tax ID number and articles of incorporation if you are a corporation.
Get your Business Bank Account then you’re Open for Business
Once you have registered your business and opened a business bank account you need to set up a merchant account so that you can receive payments. In addition to your bank account you will need a credit card merchant account in order to process credit card payments.
If you are predicting a high volume of Internet sales then an online payment system is probably the best option for your business. PayPal is an example of a payment system that allowing for instant payments. If your business will be predominantly in-store physical purchases then a point-of-sale app option is best for you. Square Register is one of the best POS apps; it works on multiple devices and allows credit card payments, creates sales reports and monitors sales trends.
Managing your Business Finances
It is vital to keep your business finances in order. Know how much tax you owe; which funds are coming into your business; all expenses; donations made by the business and payroll figures. If you have this all at your finger tips you will find paying taxes a lot less stressful and you will be able to avoid being audited by the IRS. There are many worries involved in running a business but with good planning your finances can be one less issue to worry about.
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