Every stage in business requires and presents unique challenges. Once money starts coming in, you have to decide where to keep the money. For sole proprietorship to a large business corporation, a business bank account is very important. The business bank account helps to manage your finances in a very good and professional way. It also separates the funds from your personal finances. To open a business bank account requires a lot of effort compared to a personal account. There are names to determine, licenses to put in order, and lots of documents to gather.
Furthermore, before you open a business bank account, you must know the reason why you should open one and the right bank. Also, you must decide which account is right for your business. Once you know this, opening a business bank account is very easy. And you can apply in minutes especially if it is online. The business bank account requirements depend on the bank, state where your business is, and your entity time. This article is about how to open a business bank account and why you should open a business bank account. To know about it, follow this article to the very end.
Why you should open a business bank account
Opening a business bank account makes your life simpler and your business easier. Below are the five reasons why you should open a business bank account;
- It protects your financial funds against any risk
- It helps to save you lots of headaches when you want to file taxes and avoid any challenges with the IRS.
- The business bank account helps your company appear and maintain a professional look.
- Customers will feel more secured writing checks
- It gives others access to company’s funds if you are running a corporation or partnership
- You will be able to access debits or credit cards unlike the personal account
There are a lot of reasons why you should open a bank account especially if you want to protect your company’s funds.
What you need to open a business bank account
Now let’s talk about the requirements to open a business bank account. Just like I have stated above, the business bank account requirements depend on the bank. Nevertheless, there are some common requirements to open a business bank account, check out the below for them;
- A social security number or Employer identification number
- A personal identification- driver’s license, passport or another form of state identification
- A copy of your business formation documents
- If you are running a corporation or partners you will need a operating agreement or partnership
- Business license
- Certificate of assumed business name
- Monthly credit card revenue
Once you have these requirements you can be eligible to open a business bank account in any bank of your choice. Just make use to choose an account that fits your business.
How to open a business bank account
You are ready to open a business bank account? Congratulations then. Below are what you do to do to open the account;
Decide on the account you need
There are different types of business bank accounts and you might need more than just one. The most popular ones are; Business saving account, Business checking accounts, and merchant service accounts.
Choose a bank
Once you have already decided and know the type of account you need, you also need to find the right bank. Make sure you keep these factors at the back of your mind and choose the right one. The factors are; Account variety, interest rates, branch and ATM network, Account management tools, and fees. Gather your required documents
Gather your required documents
Now that you know the bank you like to work with and the bank account you need. The next step is to gather the entire required document. Once you have that, you are ready to apply for the account. If you have any questions related to the account, you can reach out to your bank customer service
Apply for the account
Some banks allow you to apply for a business bank account online while some require you to visit the branch. Applying or opening for a business bank account should not take as long as you have your documents in order. If you have any problems when applying online do not hesitate to ask your bank. Make sure everything is done right so you won’t have problems with IRS or banks later.
Once your business account is open, you can now make transactions just like other bank accounts. The bank may require you to make a deposit to start up the account. This money or cash can be transferred from wire transfer or electronic. You can also write in check.