Most companies open a business bank account for the purposes of collecting incoming sales and paying outgoing expenses.
You’ll need a business bank account if you plan to:
Business bank accounts offer many benefits, including:
It’s worth noting that all of these benefits apply to nonprofit organizations, too. Whether you are opening as a charity or church, you will benefit from greater legitimacy, improved access to credit, and simplified accounting and tax prep once you open a business bank account.
So, how do you get started? What documents are required to open a business bank account?
Prior to opening your account, decide which financial institution you want to work with. There are many factors that go into choosing the right banking partner for your needs. Here are some of the most important ones to keep in mind:
The larger the bank, the more likely it will be able to tick the above boxes; but, be sure to check with your personal bank first. As a returning customer, it may offer you certain concessions to win your business’s business.
Once you’ve selected your financial institution, consider what type of business bank account you need. Most businesses require at least a checking account to get started. If you have a lot of cash on hand, it may make sense to also open a savings account or a business money market account.
Start lean and only choose those products and services that you truly need. This approach helps to keep costs to a minimum while still providing the infrastructure and support required to succeed. However, you also want to pick an account type that can grow with your business over time.
Banking isn’t free. There may be introductory offers and special deals at the time you open your account, but keep in mind that this fee structure may come to an end, and you’ll have to consider how these new or additional fees affect your bottom line.
Below are just some of the more common fees you can expect to pay once you open a business bank account:
Some of these fees may be negotiable, and sometimes avoidable. It pays to shop around for the best possible deal. Remove what you don’t need, negotiate what you can, and try to stay as lean as possible.
Every bank has a unique onboarding process, so it’s best practice to check with your financial institution first to determine what documents are required to open a business bank account. Below are some of the most common credentials financial institutions require:
The final step is actually opening a business bank account. The exact process varies from institution to institution. Many banks now offer online applications, which makes getting started fairly straightforward.
Depending on your requirements, however, you may need to visit a branch in-person to open a business bank account that meets your needs.
Once you’ve established a business bank account, you can move on to applying for a merchant account. This will allow you to accept credit and debit cards.
If you’re not sure how to set up payment processing, we’re here to help. At Clover, we specialize in PCI-compliant payment processing and POS solutions that allow your customers to buy from you using whatever payment methods they choose – quickly, easily, and more securely.
To learn more, schedule a free consultation with our merchant services team today.
This information is provided for informational purposes only and should not be construed as legal, financial, or tax advice. Readers should contact their attorneys, financial advisors, or tax professionals to obtain advice with respect to any particular matter.
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