Opening a business bank account separates your business finances from your personal finances. Having a business checking account is essential to successfully operating a business. It provides a professional image when customers write checks to your company instead of your name.
Consider Multiple Bank Accounts to Organize Transactions
You may want to consider opening three accounts, two checking and one savings. One checking account is for incoming transactions, such as customer checks, cash deposits, and merchant account deposits. The second checking account is for outgoing transactions, such as expenses like payroll, office lease, insurance premiums, etc. Every month you’ll transfer funds from your incoming checking account to your outgoing checking account to cover monthly expenses. The savings account is used to deposit taxes collected from customers, until its time to be paid to the appropriate state agency. A savings account is preferred over a checking account because you can earn interest on the collected sales tax, of course your company will still need to report the interest earned as income. Having these separate accounts helps make accounting easier and provides additional protection from fraud.
Opening an account is fairly easy and requires a minimal opening deposit, sometimes as little as $100. You will need a copy of your articles of incorporation, your company tax id, business address and telephone number. You should also have your company email address available if you choose to setup online banking. If you haven’t received your corporate number from the state, most banks will still allow you to open an account in your business name as long as you have a copy of the articles and your tax id. They’ll simply ask you to contact them to update the account with the corporate number as soon as you receive it.
The business name and address on your business bank accounts should be the same as indicated on your articles of incorporation and tax id. It is important that your company information stays consistent. Your company name and address will be printed on your business checks. Even if you don’t plan on using checks, you should order an initial small batch. There will be an occasion or two when you will need them. Make sure you obtain a debit card with your company name on it. The debit card will be connected to your accounts and should be used for most of your business related purchases. Using the company debit card instead of cash will make it easier for your accounting to track transactions.