That's why you must accept a variety of payments such as bank transfers, credit card transactions, and even transfers from abroad.
At the heart of all your transactions, however, is your business checking account. Nothing else can run smoothly without it. In this article, we’ll show you the benefits of having a good checking account, how you open one, and how it helps you to enhance your customer’s experience.
Having a dedicated business bank account is key to many important aspects of your small business, from accepting payments and tracking your expenses, to collaborating with external partners like bookkeepers and accountants.
It simplifies your business in several ways, including:
However, there are several different account options for business accounts, and the right choice for you depends on your business needs. For instance, you might need any or all of the following:
The standard business banking account for purchases and bill payments
A separate account with higher interest rates to hold earnings and earn a return
A special account needed to accept credit and debit card transactions from customers
A useful account for businesses dealing with international transactions
Most small businesses will need, at a minimum, a business checking account and a merchant services account. Your checking account, though, is the everyday workhorse you'll need to receive revenue and pay expenses.
While some small and medium-sized businesses, especially sole traders, commingle private and business finances, it is usually a good idea to separate the two. Keeping your business and personal finances in separate accounts brings several important benefits, such as:
Separating business and personal income and expenses gives you more control over your taxes, and minimizes the time you spend tracking and identifying transactions.
An official business banking account can help ensure you comply with all regulations, protect your finances, and reassure your customers.
It helps to separate your business and personal funds, protecting both your personal and business finances, and gives you more financial control.
Everyone has their own list of priorities when they start working with a bank, and the exact list will depend on your business. However, when you’re trying to choose the right business checking account, be aware of the following points:
It should be at the top of your list to work with a reputable institution covered by the FDIC deposit guarantee for business banking. Research your preferred financial institution to verify if they are a member of the FDIC. All FDIC-insured accounts you hold at the same bank are insured up to $250,000.
Every business is unique. Check if the bank you’re considering offers support tailored to your business needs. This may include features such as accepting credit cards, payment processing services, and great customer service.
Like everything else, banks are moving to digital-first service. However, for business banking, it can be helpful to have a partner who’s available in person when you need them. Many banks have large branch networks to serve business customers in person, along with online channels if you prefer to stay digital.
Business banking doesn’t need to be expensive. However, bank fees can be complicated. Make sure you check the list of fees and costs associated with the bank accounts you're considering, and find a fee structure that fits your business's deposit and spending patterns.
Before you open a business checking account, you'll need an Employer Identification Number (EIN). This unique number, which your business receives from the IRS, serves as your tax identification number, and banks and other institutions will typically require it to start working with you.
To open an account, you would need to provide the following details to your bank (the exact process can vary depending on the financial institution you choose):
Once you've gathered the proper documentation, it's easy to open an account. For instance, you can call East West Bank at 1-888-761-3967, and we'll help you get up and running in no time.
As a small business owner, you know how important it is to have a solid financial foundation in place. You'll rely on your business checking account every day, and it's critical to have the right partner to ensure smooth financial operations. Find out more about how East West Bank can help you on your way with our business banking services.
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