One of the first things you need to do when you start a business is to open a bank account. Yes, it is possible to run your business using your personal bank account, but it is not wise. You should not mix your personal finances with the business finances, and having a single, personal bank account for both you and your business does that. You also avoid any tax issues or possible tax errors by having separate accounts.
More importantly, having a business bank account improves your brand credibility and generates trust with your clients and customers.
Opening a bank account is easy, but like anything else, you have to be prepared for the paperwork.
Pick a Business Account
You have a number of business accounts that you can pick from. The decision depends on the business size and your future expansion plans. Here are a few options you can check out:
- No Fee Account
If your financial transactions are below 15 and you utilize the ATM machine to perform business activities, you access a business account that charges no fee. HSBC is one such bank that offers a no fee account.
- Business Direct Account:
This is perfect for a business that has a low volume of financial transactions. It’s the simplest account that you can start for your business.
- Small Business Banking Plan
A small business banking plan brings you the best that banks have to offer for small businesses. From internet banking, high volume number of financial transactions, and a set minimum balance, there are a variety of features.
- Pay-as-you-go Business Account
If your business does not utilize banks and their features often, you can pay just when you need the bank facilities through a pay-as-you-go Business Account.
These three are just some of the many options you have.
Know your Business Structure
To pick the right business account, you have to pick one within your business structure. It can range from Sole Proprietorship, Corporation, Partnership, Non- Profit, Condominium Corporation to Informal Community Organization.
Prepare the Documents
If you don’t have the correct documents, your business won’t be able to open a bank account.
- Business Registration paper
- Partnership Registration paper, if your business a partnership
- Certificate of Incorporation
- Trade Name Registration
- Past Financial Documents
Take the documents that are relevant to your business and ensure that they are the original ones.
Talk to the Bank Officer
Every bank has different bank accounts, fees and processes. Ensure that you make a thorough inquiry of the various business accounts the bank officer recommends to you. It must suit your needs and requirements. You don’t want to be paying more than you have to, and neither do you want to lose out on features and facilities that will help your business grow.
Consult an Accountant
An accountant will be able to fully understand your business needs, review your bank account options and recommend the best one.
Setting up a business bank account is not difficult, just make sure you choose the right one for your business.