The Do's and Don'ts for Your Company Bank Account

Roughly 20 percent of small business owners use the same bank account for personal and business finances.

If you’re one of these people, you’re doing your business a big disservice. Having a company bank account helps your business look more professional and makes it easier to track and manage business finances. If you’ve taken the step to open a bank account for your business, it’s essential that you learn how to use it properly; otherwise, you may not reap the benefits.

To help you make the most of your business bank account, we’re sharing a couple of do's and don’ts. Read on!

Do Find a Bank That’s Ideal for Your Business

It’s easy to walk into any commercial bank or log on to their website and open a business bank account. In most cases, you’ll only need to provide business registration documents as well as your personal ID.

However, commercial banks aren’t created equal. They’ll all offer you business banking services, yes, but what you need is a bank that offers services suited to your business. As a small business, for example, you need to open an account with a bank that has a reputation for supporting small businesses like yours.

A bank that understands how small enterprises operate and the challenges they go through is more likely to, for instance, have a higher approval rate for small businesses loans.

Some banks also offer accounts to specific types of businesses. For example, if you’re opening a bank account for your LLC, find a bank that caters to LLCs.

Don’t Mix Company and Personal Finances

You might think that opening a dedicated account for your business is enough to ensure you don’t mix company and personal finances, but that might not be the case. Even with a company bank account, some business owners don’t have the discipline to keep the finances separate.

You have to be intentional about this. Your personal money belongs to you, not your business. If you need to pay yourself, transfer the salary into your personal account. Don’t leave it in your company account just because you can access it whenever you want.

Do Establish Long-Term Business Banking Relationships

You’re at liberty to open as many business bank accounts as you wish, but that won’t be a smart move. It would mean hopping from bank to bank.

Yet, without long-term business banking relationships, it can be difficult to make the most of your company bank account. If you need a working capital loan, for example, your bank will scrutinize your banking and borrowing history. If you recently opened the account or rarely use it to transact, the bank will likely deny you the loan.

Don’t Violate Terms of Service

Every business bank account comes with terms and conditions the account holder must observe. However, the truth is most business owners don’t read the fine print and end up unknowingly violating the terms of service.

A bank can levy charges or fines on your bank account if you violate the TOS. It can even suspend or close the account, possibly affecting your operations. Imagine customers being unable to make payments into your account because it’s suspended.

Observe These Company Bank Account Do's and Don’ts

A company bank account is a vital financial tool for your business. However, it’s a tool that calls for great responsibility. Observing these do's and don’ts will help you make the most of your account.

There’s a lot to learn about business finances, so stay tuned to our blog!