Business Banking Checklist for Startups
Starting your first business may be challenging, but getting a bank account for your business shouldn’t be. A separate bank account for your business not only adds a sense of legitimacy, but may also protect your personal accounts from business-related liabilities.
Are you ready to open a business bank account?
We’re here to walk you through the five key steps to opening a bank account for your new startup.
1. Get Your Paperwork Together
As you would when applying for a personal account, you will need to compile all of the necessary documents prior to applying for a business bank account. If you are a sole proprietor, a Social Security Number may be enough.
If you are looking to brand your business beyond your personal name, it is worth the time to secure a Business Tax ID Number and register your business name. For those involved in partnerships or LLC’s, be prepared for the bank to request identification information for all owners of the business in addition to legal proof of your partnership.
2. Choose a Banking Style
Your business banking needs will continue to expand as your business grows. When launching your startup, it is important to think about how you would like to allocate your money. Will all of your income and bills originate from one central business checking account? Do you operate better with separate accounts for different items like income, payroll, and taxes?
To determine which accounts you need, review your business plan. Look at your anticipated cash flow and gauge where separate accounts may be beneficial to your business. If you have a small operation, you may only need a single checking account. Set benchmarks in revenue to help you decide when it is time to add a money market or savings account to your portfolio.
3. Do Your Research
Business banking can be quite different from personal banking. With traditional banks, key business services such as treasury management, wire transfers, and merchant services can incur fees that quickly add up and chip away at your business funds. Research different banks before opening an account – you may find that online banks offer the same services as traditional banks but with little-to-no fees.
You may also want to consider each bank’s potential lending solutions and additional banking programs. Operating your organization from one central banking hub can streamline your accounting practices and provide you a holistic view of your startup’s financial health.
4. Finding the Right Checking Account
Your main checking account will likely be your startup’s key financial tool. Research different accounts to find the perfect one that will give you the flexibility to run your business the way you see fit. Comparing business checking accounts can help you spot higher interest rates, complimentary online services, low initial deposits, or free deposit items. All of these perks reduce the cost of doing business.
For startups that anticipate a high account balance and frequent transactions, an Analyzed Business Checking account may be right for you. These accounts produce an earnings credit that offsets your monthly banking fees. On the other hand, if you think your business will start small, you may want to stick to a Basic Business Checking account that doesn’t charge monthly fees and has lower initial deposit requirements.
5. Start Selling
After you set up your accounts, you will need to start accepting payments for your products and services. Work with your bank to see if there are payment services available in partnership with your accounts. Axos Bank’s treasury management solutions offer remote deposit captures for B2B companies and payment portal services for online stores.
Are you interested in learning more about how Axos Bank can help accelerate your startup? Our banking specialists are here to help you select the right products and services to make managing your finances simpler. Give us a call today at 844-678-2726 or email [email protected] to discuss your options.
Business Banking Checklist for Startups
This blog post was published by Axos Bank on September 18, 2019 and last updated on October 24, 2019.