As a business owner, you have enormous leverage in selecting a bank that you want to call your business bank account.
Each bank you approach will win you over with all kinds of proposals, promises and offers. But how do you know what is best for your business needs?
Fortunately, the best banks all compete for a limited base of business owners. Therefore, it is unlikely that there will be too many variations in the offers that each one brings to you.
However, that being said, there are some things you should expect from your bank when you are ready to use them for your business bank account.
Without getting into the weeds just yet, do you know how much you’ll be charged if your bank account balance drops below a certain number every month, week, or day?
Do you get preferential rates on long term loans, secured credits or business related banking activities? Do you have access to a business advisor in your bank?
What about foreign currency transactions? What commissions will your bank charge you if you need to exchange money for foreign currencies? What about the credit card facilities that are equipped for your smartphone, tablet or mobile phablet?
These are just a few of the many questions that you should seriously consider, depending on the type of organization you run, as a business owner.
Let’s take a look at the most important aspects of a business bank account and see how important they are to you before opening an account.
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Consider your options with business account services
As a business owner, you may not be able to afford an accountant or bookkeeper. However, the payroll services offered by banks offer you great added value as a business owner.
For example, the services offered by banks may be preferable to those offered by external organizations.
For example, what will be the result if you don’t have enough funds in your account and you manage the payroll? Then, of course, there are things like fraud insurance.
If, for example, you have fraudulent activity on your business current account, how will your bank deal with you? Equally important is the issue of bad checks from the vendors you work with.
You will certainly find a lot of added value in things like discounts offered by partner companies. For example, you can get preferential deals on office supplies, hotels, airlines, insurance, etc.
If your business offers employee retirement plans with things like retirement plans and 401k plans, you should try to look at the services offered by your bank and not your insurance agent.
These types of incentives are in great demand by businesses. You will also want to carefully consider the control you have over business credit cards.
Will your investment banker work with you in this regard? You’ll want to make sure your employees aren’t using business credit cards for non-business activities.
The control of staff costs is essential in this regard. The latest such offer available to business customers is Visa credit card payment control.
Associated article: Before a business loan: questions to ask yourself
What to avoid with business bank accounts
As a business owner looking for a bank account, knowing how to do things right can be very confusing. Before even considering the options listed above with business account services, you should avoid making the following mistakes.
For example, before you start to open the account, do you have all the necessary documents on hand? Do you have exactly what you need to open the right account?
Keep in mind that each credit union or bank you contact will have different requirements, and you need to stay on top of things to ensure that you are providing exactly what is needed for your personal situation.
The most common documents that you will need to bring with you include your tax ID number, social security number, and your business registration details.
Be aware that you will not be using your personal Social Security number to open a business bank account in the United States, you will be using your Federal Employer ID number.
When it comes to pooling funds, you definitely don’t want to mix personal and business funds. It becomes extremely difficult to separate personal expenses from business expenses.
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If your business has multiple staff, it is a good idea to decide how to handle check signatures. Will you need a single signature on checks or multiple signatures on checks?
And there are other issues as well. For example, will you require signatures on checks that are over a certain amount or not?
This is a decision that must be made before opening a business account. And when it comes to banks, you need to think carefully about which bank you choose for your business account needs.
Sometimes the bank at the top of 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 chequing accounts.
And when it comes to checking accounts, you’ll want to be sure the name printed on your checks is the correct name.
Believe it or not, this means the world of difference when it comes to fraud related activities.
And to top it off, you’ll still want to make sure you maintain the minimum daily or monthly balance in your business accounts. If you don’t, you’ll soon find yourself paying exorbitant bank charges. The last thing you want is for the bank to make money with your business.
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