How to Open a Business Bank Account
Every business owner needs a separate bank account for their business, even if you operate a start-up business from home. The separate bank account is the only way to keep track of your finances and business records. It is mandatory for every business owner to keep his personal transactions separated from his business transactions.
A business bank account:
- Tracks your income and expenses.
- Makes it easier to file your taxes with the IRS.
- Limits your personal liabilities.
- Simplifies your business expenses during an audit.
3 Steps to Opening a Business Bank Account:
- Select Your Bank: When selecting your bank consider different financial institutions in your area. Furthermore, don’t use the same bank that you use for your personal accounts. Consumer banking is different from business banking. Therefore, it is necessary that you speak with several banks to decide which institute suits your company’s needs.
- Account Costs: The fees you pay each month for your business account will depend on the financial institution you select. Certain banks offer a no fee business checking account if you maintain a minimum balance with their bank. While other banks may require a certain amount of money to open the account. Afterwards, they don’t require a minimum balance in their no fee checking account. However, if you need an enhanced account, you will pay higher fees each month, but you will have access to other banking services. Therefore, it is necessary that you consider the bank’s requirements for your monthly balance and the fees you pay each month before you open an account with any institution.
- Documents: There are certain document requirements every business owner must supply the bank when they open their business account. Depending on the institution the documents will vary because of your business classification. If your company is a sole proprietor the requirements are minimal and you only need a tax ID number and your social security number. However, if you are a corporation, you will need other documents to open your account. When you speak with each bank ask about their requirements.
Every business owner needs a business bank account for their company. No matter how large or small your business, a separate business account is mandatory. This helps your company identify tax deductions and separates your personal finances from your business finances. Speak with several banking institutions before deciding on the bank for your company.
About Julie Sinclair
Julie is a retired school teacher who loves writing, gardening, Internet research, crafts, and being with her family. After retirement Julie has kept up her skills in computing by taking classes at the College near by.