As a business owner, you have tremendous leverage when it comes to selecting a bank that you wish to call your business bank account.
Every bank that you approach will entice you with all manner of proposals, promises and offers. But how do you know what is best for your business needs?
Fortunately, the best banks are all competing with one another for a limited base of business owners. Therefore it is unlikely that there will be too much variation in the offerings that each one provides you with.
However, that having been said, there are certain things that you should demand from your bank when you are prepared to use them for your business bank account.
Without getting into the weeds just yet, do you know how much you will be charged if your bank account balance falls below a certain number every month, every week or every day?
Do you get any preferred rates on long-term loans, secured credit or business-related bank account activity? Do you have access to a business consultant at your bank?
How about foreign currency dealings? What commissions will your bank be charging you if you need to exchange money for foreign currency? What about credit card facilities that are equipped for your mobile smartphone, tablet or phablet?
These are but a handful of the many issues that you should seriously consider, depending on the type of organization that you're running, as a business owner.
Let's drill down into the most important aspects of a business bank account, and see how important these are to you before you open up an account.
Related Article: Before the Business Loan: Questions That Must Be Asked
Consider Your Options With Business Account Services
As a business owner, you may not have the wherewithal to pay for a bookkeeper or an accountant. However, payroll services offered by banks provide plenty of added value to you as a business owner.
For example, bank-offered services may be preferable to those offered by outside organizations.
For instance, what will the outcome be if you have insufficient funds in your account and you’re managing payroll? Then of course there are things like insurance against fraud.
If for example you have fraudulent activities taking place in your business checking account, how will your bank take care of you? Of equal importance is the issue of bounced checks from the vendors that you are working with.
You will certainly find plenty of added value in things like discounts provided by partner companies. For example, you can get preferential deals on office supplies, hotels, airlines, insurance and the like.
If your business is engaged in offering retirement plans to employees with things like pensions and 401k plans then you should try to look at the services offered by your bank and not your insurance agent.
These types of incentives are in high demand with business organizations. You will also want to carefully consider how much control you have over company credit cards.
Will your business banker work with you in this regard? You will want to be sure that your employees are not using business credit cards for non-business related activities.
Control over staff expenditure is essential in this regard. The latest such offer available to business clients is Visa credit card payment controls.
Related Article: Before the Business Loan: Questions That Must Be Asked
What to Avoid With Business Bank Accounts
As a business owner looking for a bank account, it can be really confusing how to get around to doing things right. Before you even consider the options listed above with business account services, you should avoid making the following mistakes.
For example, before you get started opening the account, do you have all the required paperwork in hand? Do you have exactly what you need to open the right account?
Remember that each credit union or bank that you approach will have different requirements and you must stay on top of things to ensure that you’re providing exactly what’s needed for your personal circumstances.
The most common documents that you’ll need to bring with you include your tax ID, social security number and details of your company registration.
Be advised that you will not use your personal social security number to open a business bank account in the U.S., you will be using your Federal Employer ID number.
On the issue of comingling of funds, you certainly don’t want to be mixing personal funds and business funds. It becomes extremely difficult to separate personal from business expenses.
Related Article: What Should New Business Owners Expect When Requesting a Bank Loan?
If your business has multiple staff members it is a good idea to decide how to deal with signatures on checks. Will you require a single signature on checks or multiple signatures on checks?
And there are other issues, too. For example, will you be requiring signatures on checks valued over a specific amount or not?
This is a decision that must be made prior to opening a business account. And on the issue of banks, you should carefully consider which bank you choose for your business account needs.
Sometimes the bank up the road for you is not the right bank, and choosing a bank based on convenience or location is insufficient. Not all credit unions offer things like business checking accounts.
And when it comes to checking accounts, you will want to be sure that the name printed on your checks is the right name.
Believe it or not, this means the world of difference when it comes to fraud-related activities.
And to cap it off, you will always want to ensure that you maintain the minimum daily or monthly balance in your business accounts. If you don’t, you will soon find yourself paying extortionary bank fees. The last thing you want is the bank earning money off your business.