It is always a bright idea to open a business bank account to manage your finances if you are running a business. Below are some of the pitfalls which must be avoided with business bank accounts.
Incorrect information at account setup – Each bank has got different requirements, so when you book the appointment, ask the banking officer exactly what is needed. You should by all means also try to avoid making the mistake of using a wrong tax ID to open an account.
Ensure you have firmly designated business account – Depending on the size of your business, it may be wise to open individual separate accounts for revenue, collected sales tax, estimated income tax and payroll.This will keep your business finances organised and make life easier at tax time. Ensure you segregate your revenues and expenses from your personal finances.
Plan for cheque signing authorities – Quite often, small business owners forget about planning for business cheque signing. If your business includes a partner or staff members, decide whether business cheques require one signature or two. If the business checks require two signatures, will this be for all check amounts or only amounts over a certain value.
Avoid choosing the wrong bank – Opening a business account at the neighborhood bank or the one you know best may not be the best idea if that bank doesn’t offer services crucial to your business. Before choosing an option for your business banking account, get an assessment of what you need out of your business banking relationship. Another option is to start by checking out the business banking services offered as part of a group or organization you belong to.
Ensure you maintain the minimum monthly balance – Some business bank accounts offer monthly fee waivers if the account balance stays above a stated minimum every day of the month. Don’t make the mistake of paying unnecessary bank fees by letting your balance fall below the minimum.