{"id":3563,"date":"2018-11-22T16:18:06","date_gmt":"2018-11-22T14:18:06","guid":{"rendered":"https:\/\/www.lending-express.com\/blog\/?p=3563"},"modified":"2019-02-18T10:11:37","modified_gmt":"2019-02-18T08:11:37","slug":"common-business-banking-mistakes-and-how-to-avoid-them","status":"publish","type":"post","link":"https:\/\/www.become.co\/blog\/common-business-banking-mistakes-and-how-to-avoid-them\/","title":{"rendered":"Common Business Banking Mistakes and How to Avoid Them"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Every small business owner and entrepreneur needs to set up a business bank account. Sounds simple, but unfortunately there are some common mistakes that can throw a spanner in the works. Find out what these mistakes are so you can avoid doing the same (or fix them if you\u2019ve already made them!).<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">What is a business bank account?<\/span><\/h2>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Before we go into the common pitfalls to avoid, you\u2019ll need to know what a business bank account is. A business bank account differs from your personal bank account in that it is a place purely to keep your company\u2019s money. Any money that comes into or out of a business should be run through a business bank account. <\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span style=\"font-weight: 400;\">Benefits of a business bank account:<\/span><\/h2>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">If you aren\u2019t yet convinced that you should open a business<\/span><span style=\"font-weight: 400;\"> checking account then we\u2019re here to show you how opening a business bank account is actually a pretty damn good idea.<\/span><\/p>\n<p><b>Benefits of a small business bank account:<\/b><\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li style=\"font-weight: 400;\"><b>Organization<\/b><span style=\"font-weight: 400;\"> &#8211; you\u2019ll be able to keep all of your business records neatly organized allowing you to easily file your taxes accurately <\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Accurate tax deductions<\/b><span style=\"font-weight: 400;\"> &#8211; mixing your personal and business account can lead to a big mess when it comes to filing taxes and you could miss out on saving money and even face <\/span><a href=\"https:\/\/en.wikipedia.org\/wiki\/IRS_penalties\"><span style=\"font-weight: 400;\">IRS penalties<\/span><\/a><span style=\"font-weight: 400;\"> (for those in the US) and <\/span><a href=\"https:\/\/www.ato.gov.au\/general\/interest-and-penalties\/penalties\/\"><span style=\"font-weight: 400;\">ATO penalties<\/span><\/a><span style=\"font-weight: 400;\"> (for those in Australia)<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Start accepting credit cards<\/b><span style=\"font-weight: 400;\"> &#8211; having a business checking account will open you to a whole new pool of customers, that is, those that want to use credit cards. You can\u2019t accept credit card payments to a personal bank account, thus limiting the number of customers you can reach!<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Include multiple account signers <\/b><span style=\"font-weight: 400;\">&#8211; with a business checking account you\u2019ll be able to allow other people (such as trustworthy employees) to run admin work so that you can focus on other areas of your business.<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Increase professionalism<\/b><span style=\"font-weight: 400;\"> &#8211; who doesn\u2019t want their business to look more professional?<\/span><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Need a way to better manage your business\u2019s transactions, invoice and general accounting? <\/span><a href=\"https:\/\/quickbooks.intuit.com\/au\/partners\/lending-express\/?cid=par_lendingexpress_EDM1\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Quickbooks <\/span><\/a><span style=\"font-weight: 400;\">is a top accounting service provider that will take the headache out of your business accounting! Find out the <a href=\"https:\/\/www.become.co\/blog\/top-3-accounting-software-for-small-businesses-in-2019\/\" target=\"_blank\" rel=\"noopener\">top 3 accounting software for small businesses<\/a> here.&nbsp;<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span style=\"font-weight: 400;\">How to open a small business bank account<\/span><\/h2>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">When opening a small business bank account, the first thing you\u2019ll need to do is to choose the right bank (see point one below!).<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">You\u2019ll then need to prepare the documents needed. For <\/span><b>sole proprietorships<\/b><span style=\"font-weight: 400;\"> you\u2019ll need:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Your social security number (also known as your taxpayer identification number). You will need an Employer Identification number if you have employees already. <\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Business license<\/span><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Depending on whether you have a partner or a cooperation, will affect the other documents you need. <\/span><\/p>\n<p><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">For more information on all the documentation needed, check out the <\/span><a href=\"https:\/\/www.sba.gov\/blogs\/how-open-small-business-bank-account-online\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Small Business Administration <\/span><\/a><span style=\"font-weight: 400;\">website. <\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span style=\"font-weight: 400;\">Don\u2019t make these mistakes!:<\/span><\/h2>\n<p>&nbsp;<\/p>\n<blockquote><p>Instead of burning your money (maybe without even realizing it), learn how to avoide these common business banking mistakes!<\/p><\/blockquote>\n<p><img decoding=\"async\" class=\" wp-image-3569 aligncenter\" src=\"https:\/\/www.become.co\/blog\/wp-content\/uploads\/2018\/11\/iStock-943483336-1-923x1024.jpg\" alt=\"\" width=\"425\" height=\"471\" srcset=\"https:\/\/www.become.co\/blog\/wp-content\/uploads\/2018\/11\/iStock-943483336-1-923x1024.jpg 923w, https:\/\/www.become.co\/blog\/wp-content\/uploads\/2018\/11\/iStock-943483336-1-271x300.jpg 271w, https:\/\/www.become.co\/blog\/wp-content\/uploads\/2018\/11\/iStock-943483336-1-768x852.jpg 768w, https:\/\/www.become.co\/blog\/wp-content\/uploads\/2018\/11\/iStock-943483336-1-243x270.jpg 243w, https:\/\/www.become.co\/blog\/wp-content\/uploads\/2018\/11\/iStock-943483336-1.jpg 721w\" sizes=\"(max-width: 425px) 100vw, 425px\" \/><\/p>\n<h3><span style=\"font-weight: 400;\">1. Not choosing the best business bank account<\/span><\/h3>\n<p><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">Not every bank is created equal. <\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">What works for you on a personal level may not necessarily work for your business. <\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Avoid the pitfall of choosing your existing bank out of convenience, as your personal bank may not offer the best business solution. Rather, take the time to research the different business banking options out there to find the best match for your business.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><b>Some important account benefits to look out for are:<\/b><\/p>\n<p>&nbsp;<\/p>\n<ol>\n<li style=\"list-style-type: none;\">\n<ol>\n<li style=\"font-weight: 400;\"><b>Free banking services<\/b><span style=\"font-weight: 400;\"> &#8211; look for a bank that cancels out monthly account fees if your account balance is consistently above the minimum required. <\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Flexibility <\/b><span style=\"font-weight: 400;\">&#8211; the bank you use should be as flexible as your growing business <\/span><\/li>\n<li style=\"font-weight: 400;\"><b>High-quality online banking <\/b><span style=\"font-weight: 400;\">&#8211; as all the major banks these days offer online banking facilities, just make sure the bank you choose has high-quality online banking that\u2019s easy for you to navigate &#8211; as you\u2019ll most likely use online banking on a daily basis. <\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">You can even connect your bank account to online apps, just like you can do with <\/span><a href=\"https:\/\/www.become.co\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Become<\/span><\/a><span style=\"font-weight: 400;\">. With Become, you\u2019ll be able to connect your business bank account to access your personalized dashboard (more on that later) &#8211; which makes transacting online simpler, more convenient and more secure.<\/span><\/li>\n<\/ol>\n<\/li>\n<\/ol>\n<p>&nbsp;<\/p>\n<h2><span style=\"font-weight: 400;\">Best business bank account for SMBs<\/span><\/h2>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">In our opinion, the best small business bank account has to be <\/span><a href=\"https:\/\/www.chase.com\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Chase<\/span><\/a><span style=\"font-weight: 400;\"> and lucky for you, there are thousands of Chase banks across the USA. You can get a business checking account with no fee, just as long as you maintain $1,500 in the account, which shouldn\u2019t be too hard and also has a quality online banking and mobile banking app. <\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">For those that want to know the best business bank accounts in Australia, <\/span><a href=\"https:\/\/www.canstar.com.au\/business-transaction-accounts\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Canstar <\/span><\/a><span style=\"font-weight: 400;\">has a great comparison tool. You can enter your needs and find an account to best suit you! Handy. <\/span><\/p>\n<p>&nbsp;<\/p>\n<h3><span style=\"font-weight: 400;\">2. &nbsp;Not check signing authorities<\/span><\/h3>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Small business owners often forget to set up check signing authorities in advance. If you have a partner or employees you might want your business checks to require two signatures. If so, you\u2019ll also need to decide whether the double signature is required for every check or just for checks above a specific amount. If you don\u2019t decide all of this upfront you\u2019ll be stuck with the hassle of changing things later on.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h3><span style=\"font-weight: 400;\">3. Ordering incorrect checks<\/span><\/h3>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">This happens more often than you\u2019d think. <\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">A business owner orders business checks but requests the wrong company name on the checks, often printing their trading name or DBA (doing business as) name on the check instead of the business\u2019s legal entity name. This can pose many problems, especially if you accept online credit card payments. Seems strange right? What exactly do credit card payments have to do with business checks? Let us explain\u2026<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Many credit card processors, including PowerPay, ask for a void business check and they need the business\u2019s legal name to match the name on this check. This helps them to verify that the business is legit and that there\u2019s no risk of online banking fraud.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h3><span style=\"font-weight: 400;\">4. Not maintaining a monthly minimum balance<\/span><\/h3>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">If the bank you\u2019ve chosen does offer the benefit of zero monthly fees, you\u2019ll need to make sure to maintain the required minimum monthly balance. If your balance drops below that minimum, you\u2019ll start accumulating monthly charges. We suggest keeping your balance slightly above the minimum amount so that if it unexpectedly falls due to unforeseen expenses or lower revenue, you won\u2019t be charged any fees.<\/span><b><\/b><\/p>\n<p>&nbsp;<\/p>\n<h3><span style=\"font-weight: 400;\">5. Not having a separate business account<\/span><\/h3>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">As much as 32% of small business owners don\u2019t have separate business and personal bank accounts (research conducted by Researchscape for Seed online SME banking platform). Combining the two can result in major tax, accounting and reporting issues, so make sure you set up an independent business account from the start.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span style=\"font-weight: 400;\">Open a business bank account = more funding opportunities<\/span><\/h2>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">When you open a business bank account, you\u2019ll also open the door to more funding opportunities for your business. Not only will you be able to forge a better relationship with your bank, which may help you get a <\/span><a href=\"https:\/\/www.become.co\/business-loans\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">business loan<\/span><\/a><span style=\"font-weight: 400;\"> from them in the future, but you\u2019ll also increase your options with alternative lenders. <\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">When you apply for a business loan with Become, for example, you\u2019ll need to connect your business checking account. By doing this, Become will better be able to analyze the financial health of your business and find you a lender best matched to your businesses finances and your needs.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p>Making sure the loan that you get, is one that you can afford and reasonable for you to pay back. It\u2019s not about getting the MOST money when it comes to a business loan, it\u2019s about getting the best one for YOU &#8211; w<span style=\"font-weight: 400;\">hich is only possible when analyzing your business checking account.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: center;\"><span style=\"font-weight: 400;\">So what are <\/span><b>you <\/b><span style=\"font-weight: 400;\">waiting for? Make sure you have a solid business checking account and stay clear of these common mistakes.&nbsp;<\/span><\/p>\n<p>&nbsp;<\/p>\n<h6><b><i>Disclaimer: The information contained in this article is provided for informational purposes only, should not be construed as legal advice on any subject matter and should not be relied upon as such. The author accepts no responsibility for any consequences whatsoever arising from the use of such information.<\/i><\/b><\/h6>\n","protected":false},"excerpt":{"rendered":"<p>Every small business owner and entrepreneur needs to set up a business bank account. Sounds simple, but unfortunately there are some common mistakes that can throw a spanner in the works. Find out what these mistakes are so you can avoid doing the same (or fix them if you\u2019ve already made them!). What is a [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":3570,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[13,1,12],"tags":[155,153,158],"class_list":["post-3563","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-aus-resources","category-uncategorized","category-us-resources","tag-bank-balance","tag-monthly-deposits","tag-non-sufficient-funds-nsf"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Common Business Banking Mistakes and How to Avoid Them - Business Funding Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.become.co\/blog\/common-business-banking-mistakes-and-how-to-avoid-them\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Common Business Banking Mistakes and How to Avoid Them - Business Funding Blog\" \/>\n<meta property=\"og:description\" content=\"Every small business owner and entrepreneur needs to set up a business bank account. 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