Small Business Bank Accounts
Small business bank accounts are crucial for those entrepreneurs opening their own commercial enterprise. Uncle Sam at tax time doesn't care at all if that entrepreneur uses his own bank account for commerce purposes, but if the business grows one whit, the practice could create a nightmare in accounting the next tax season. Perhaps one of the issues not always considered in the rosy glow of starting a commercial venture is the image that is presented when an entrepreneur does use personal checks to cover professional and enterprise expenses. Kind of like a tree surgeon using a personal smiley face check for mechanical work on his truck. It doesn't fit the image and so from the very beginning of a small enterprise inception having commercial bank accounts for one's commercial venture is important.
When an entrepreneur begins a new venture, it is extremely important that come tax time, one should easily be able to separate out all actual business expenses from personal ones. For high expense start-ups, this would be crucial to the success of tax optimization. Small business bank accounts can help do that very thing beginning with a checking account. Checks, ATM card and an accounting of all expense transactions as well as the deposit of all income are easily accomplished in this manner. Of course, perhaps comparing various banks' transaction fees and other features might be helpful in knowing which financial institution to use. Because there are usually at least two or more commercial accounts available for small enterprises at each facility, knowing how many transactions to anticipate will probably help decide which plan to use because they are often based on the number of checks written each thirty days.
An additional account that a small business owner will want to have includes a savings component. Now this will include all the routine reasons, the most outstanding is just a place to perhaps store income not needed for the time being. Another very important reason for small business bank accounts may be for the up and coming health savings accounts for employees and if employers opt to contribute to these accounts, there may be a need for a separate place to put this company money. With a savings account, an owner can choose the kind of plan most beneficial to his business and the choices will include the basic plan, much akin to the passbook type with which most people are familiar and a Certificate of Deposit, usually requiring higher deposit amounts and longer stays within the banks four walls, usually from six months to five years. Finally, there is the money market option that pays the highest amount of interest and requires regular large sums of deposited money. Checks can be written on small business bank accounts like this but are limited in number.
Of course, there is always the need for entrepreneurs to secure loans for various purposes. The savvy businessperson will want to borrow the most low cost money possible, which traditionally comes from a bank. While money might be easier to obtain from a broker or other loan sources, it is usually much higher in interest rates. So developing a relationship with a local bank and having all of one's small business bank accounts in one spot makes it easier for a loan officer to say yes to requests from and entrepreneur that is a bank's customer. Few people seem to understand the mercy of God except when they are spared in an accident or similar experience. But God is worshipped by Christians for His mercy to sinners who deserve eternal banishment from God's presence, but instead receive eternal life through Jesus Christ. "I will sing of the mercies of the Lord for ever: with my mouth I will make known thy faithfulness to all generations." (Psalm 89:1)
When someone who has had a rocky credit history, it becomes more difficult to secure small business bank accounts, even ones that most people take for granted. The reason for this difficulty is that when beginning a business, it is the owner's federal id number or social security number that is used for all transactions, including the securing of small business bank accounts. Eighty percent of all banks in America are using two check reporting agencies, ChexSytems and Telecheck and if an entrepreneur has had any bounced checks in the past few years, the reports from these companies may hurt his or her chances to actually get small business accounts from any of the thousands of banks. The other twenty percent of American banks that do not use these two reporting agencies' services are still prime candidates for what is known as a bad merchant account. However, one of these banks may be many miles from the wonder's business making it a true inconvenience. The answer for that new small venture owner is online banking.
Small business bank accounts from online providers are the perfect solution for those carrying the stigma of a bad credit merchant status. For these online providers, it is typically not a problem to secure a checking and savings account despite one's checkered credit past. Loans may or may not be available right away, perhaps dependent upon no overdrafts and other delinquencies for a period of time. But online banks do provide bill paying, direct deposit, savings accounts and ATM debit card solutions. This option can allow a business to actually exist almost anywhere without the need to be near a brick and mortar financial institute. If our tree surgeon knew all this, his checks might have a chainsaw.
Small Business Checking AccountA small business checking account can offer the small business owner some advantages and conveniences without having to pay a large monthly service fee or maintain a minimum balance amount. Most banks have many different types of accounts to choose from including ones that have no service charges and a free initial check order. Free business checking accounts do not have a minimum balance requirement or a monthly service charge. Most offer a free debit card and free bill pay. As a company grows there may be a need to take advantage of a bank account that has additional advantages such as earning interest and overdraft protection. A small company owner will need to keep personal funds separate from business funds and the best way to do this is to open a bank account in the name of the company.
Starting a new company can be much easier if the owner will keep the business separate from personal in all aspects. In order to do this effectively the owner needs to open a small business checking account. Other important considerations include constructing a company plan, targeting customers, finding the right location, purchasing insurance, how to do the marketing, taking care of the accounting, and paying taxes. Doing some research online can give a person some ideas about the best banking choices and what kind of account to choose. Starting out with free resources will probably be a good idea in an effort to try and keep expenses and cost down. "If any of you lack wisdom, let him ask of God, that giveth to all men liberally, and upbraideth not; and it shall be given him" (James 1:5).
Overdraft protection is a good thing to consider having when choosing the right type of small business checking account. When the ledger balance becomes overdrawn overdraft protection will continue to pay checks or drafts. Banks may charge insufficient fund charges even with overdraft protection so even though the checks are paid there are fees accrued that will have to be paid to the bank. Normally the bank will set a limit on how much will be paid on behalf of the person for overdraft protection and exceeding that amount will mean that checks will be returned unpaid.
A new company owner will want to consider developing a budget to avoid occurrences where paying fees and other charges can become commonplace. Bank fees can add up quickly and will put a company in the red. Banks that offer free business checking accounts might be one option to consider. This would limit a regular monthly service charge. Some other advantages to free checking may include no fees on a debit card and no charge on an initial check order. A budget will help the company owner to realize the importance of being careful with company funds.
Online banking is a convenient solution for new companies that desire access to funds and balance information frequently. The Internet gives the customer access whenever needed. Free business checking accounts that give customers free Internet access provides many conveniences. A person can view all transactions, find out the balance, track all deposits, and use online bill pay convenience. In addition, a customer may be able to take advantage of accounting software packages that integrate with the banking system so that it is possible to download bank information straight into business software. However, downloading transactions into company software may not be included as a free service by all banks. The software used by the bank must be compatible with the software used by the company.
Online banks offer other tools and resources to their customers that may help in managing a business. Some of these tools that come with opening a small business checking account include information on accounting, marketing, sales, human resources, and how to grow a business. Business articles that may prove to be helpful through online banking include how to understand the lending process, offering credit to customers, accepting credit cards, and other valuable information. Some of these articles cover topics such as bartering and trade arrangements, how to establish trade credit, using personal credit for business, commercial bank loans, government loans and grants, taking a company public, and how to make investments.
Benefits for a small company owner can often be found through banking services. Those that offer free business checking accounts may also provide merchant services so that a company owner can offer customers the convenience of using credit cards to pay for services and products. Taking credit cards for payment can help a company to achieve higher sales and improve profits. Using merchant services does usually include fees that are incurred based upon a percentage of the total charge amount. More information can be found on the Internet or by calling a banking representative.
Advanced company banking may be a more suitable choice for companies who maintain a high balance at all times and have minimal transactions. Advanced banking often includes more resources to clients through using the Internet or by making a phone call. Advanced accounts do not incur service charges if the balance is maintained according to the guidelines set by the bank. This type of account allows the customer to make transfers between accounts, initiate stop payments, look at interest posted, see the balance at all times, and take advantage of other resources. Online banking through advanced checking can help a company owner to be more informed about financial situations.