Cash is king for an entrepreneur. Your bank is your wingman, helping you maximize your access to cash. Your wingman paves the way for success, and your bank should do the same for your business. Here are some things to keep your bank working for you now and the next few years.
When choosing a bank for business checking, you need to shop around.
Things to consider in a business checking account:
- Speed: When is cash available after a deposit? Same day? One or two days? This can make a big difference for some businesses.
- Data: It should easily interface with QuickBooks. Most big banks and many smaller banks have a streamlined import, some smaller banks have a few extra steps. Call them to verify if it will work with the QuickBooks that you're using (2013, online, 2012 or older, etc).
- Statements: It should provide online bank statements. Some small banks do not provide this feature for free. Ask how long the statements are available (6 months, 1 year, 2 years, etc).
- Moving Money: Can you easily transfer between business & personal accounts? Look for a single log-in to both accounts if they’re at the same bank.
- Access: Can you get online access for a bookkeeper or accountant to download your transactions? You can limit the access to certain functions (such as permitting downloading but prohibiting bill pay or transfers).
- Fees: What small business loves to hate! Small business banking should be free or with a minimal fee. A large regional bank in my area actually charges $30 a month to download into QuickBooks, unless the account has a $15,000 balance. These two concepts are completely at odds with each other when it comes to small business, especially solopreneurs. Wouldn't you want to know this before you signed up with this bank?
- Customer service: should be amazing (or at least good) and website should be easy to navigate. Digital check images are a must.
- Location: Notice this is last on the list. Yes, it's important, but it shouldn't be the only thing you look for when selecting a business checking account.
Found a great bank, but don't like the fees? Talk with a bank rep about waiving fees if you get one or more of the following:
- Get a credit card from the same bank
- Spend at least $___ on their debit card, or use the debit card for a minimum of __ transactions per month.
- Use their mobile payment technology for accepting credit cards
- Use other services the bank my offer (payroll processing, wire transfers, retirement accounts, etc).
It's old school, but if you will use checks, order checks with carbon copies. It will save you time down the road if you need to refer back to the original check (and there will be a time when you fall behind and the bank no longer carries the image online). Not all banks provide permanent access to check images through the bank statement or online banking.
Prior to opening a business checking account, you may need to get a business license from your town or city. Where I live, this notifies the town to assess personal property tax on my business property like desk, chair and computer. It won’t amount to much tax, but I need to report this information annually. Be on the lookout for something similar in your area. You may need to visit your city or town hall as this information may not be online.
Think long term. Setting up a bank account is easy. Switching bank accounts is a major hassle! Think of all the accounts that you have linked up to your checking account. It's more than you think! Talk to other small business owners with similar banking needs, see what they love or hate about their banks. There's more to a bank than monthly fees. Consider how you expect your business to grow over the next 3-5 years, and look for a bank that can support your business over that time.