There are multiple steps when searching for the right bank for you and one of the most important things to look at when opening a business account is the relationship between you and your bank as it will last for years to come.
So, why do you need a bank account? You could just use your personal accounts but as you’ll find out in this article a business account is an essential aid to your company’s success.
Here are a few reasons a business account is essential:
Tracking your expenses is an important area for any business. Therefore, by keeping your personal and business accounts together you’re creating a stressful situation as you have to sort through your transactions to link your expenses to their source. This is a time-consuming task that can deplete your time spent making your business successful.
It’s important to have all your business numbers in one place, so when tax season starts, whether you decide to do your accounts yourself or hand your statements to an accountant it will be a whole lot easier.
The relationship you have with your bank is important, especially if you’re looking for extra services from them in the future, such as a loan. You’ll need a substantial business plan as well as a trusting relationship to obtain the necessary funds.
There are a few things to consider when choosing the bank, you want to work with:
Bank fees – Remember every bank has fees so make sure you ask about their fees and structure. Big banks can offer lower fees as they have a larger client base.
Lending ability – Does the bank you’re looking at authorise a small business loan or do you have to go through a long process?
Online features – Check what online features the bank offers, most banks will offer online features, such as paying your bills online and transferring money from your business account to your personal account.
Customer satisfaction – Big banks outrank smaller banks in this area, but some people find that working with your local branch can provide more personal satisfaction.
Online banks – Some people find online banks such as Tide and Starling to be more appealing as they tend to offer a bigger variety of digital features, such as banking apps and a user-friendly dashboard. A variety of different benefits are included when using online banking such as instant invoicing, scheduled payments, no monthly fees and cash deposits.
What do you need when opening an account?
• Employer identification number
• Proper ID
• Certification of business identity
• Business license (only required for certain business)
• Bank application
What to expect when you open an account?
Firstly, you will discuss your business needs with a banker. You will be shown different account options and review your paperwork - if you haven’t already filled this out, you’ll do so now.
Then you’ll fill out a signature card to confirm your signature on various transactions and if you have a business partner then they will need to sign as well.
The bank will check your personal credit score, so they can work out who they’re dealing with. They will also look at your financial history.
If you plan to discuss additional products like saving accounts, business credit cards or lines of credit then the whole process will take just over an hour.
You’ll also be given a temporary checkbook; most banks also provide a temporary ATM or debit card. The official one will be mailed to you several days later.