Did you know that 75 percent of struggling small businesses feel that being disorganized affects their productivity?
As a company, you can’t afford to have your processes all over the place. That relates to staff organization, how you conduct meetings, and pretty much every single aspect of your entire operations!
One area in particular that you need to keep on top of is your finances. A business bank account can help you do just that, but you need to know how to set one up before you reap the benefits.
Find out how to open a business bank account in this handy guide.
What Is A Business Bank Account?
A business bank account is opened solely for business banking. This means that it’ll only be used for transactions relating to your company, and not for personal finances. It helps CEOs to stay on top of their business bookkeeping, calculating their cash flow and doing their taxes easily without having to sift through a heap of personal transactions.
A business account can be opened in the name of the company. When people receive payments from the account, it’ll be under the name of your company rather than your personal name. It’s easier for customers and suppliers to spot your payments and looks more professional.
You may also receive higher interest with certain business accounts, and you may be able to spend more on a business credit card, helping to fund larger purchases.
How to Open a Business Bank Account
Business banking isn’t quite the same as traditional banking, and you’ll need to open your account differently. Let’s take a look at the steps you’ll have to take.
Choose Your Bank
First things first, it’s time to choose your bank. Not all banks are created equal, and you should spend some time shopping around until you find a company you like with offers that are beneficial to you. Consider your highest priorities, for example, you may value great customer service or high-interest rates and need to find a bank that offers those things.
It’s also wise to look at business banking trends. There are set to be 200 million online bankers in the US by next year, for example, and if you enjoy the benefits of online banking it’s vital you find an account that offers it. Look into the latest technology and trends to find the right bank for your needs.
Choose Your Account
Once you’ve found a bank, you need to choose an account. There are often different types of business accounts available. Choose a traditional business checking account if you want flexibility when managing your finances, or a business savings account if you’re looking to put profits aside for future purchases.
Provide the Correct Information
Just as with a normal bank account, the bank will require certain information to open your account. This can include:
- Documents regarding your business formation
- Your business license
- Your social security number
- Your employer identification number (EIN)
- Partnership agreement
What you need will differ if you’re a sole proprietorship or a partnership. Know which you are before opening an account.
Make a Deposit
When you’ve delivered the necessary information and your account has opened, the final step is to deposit funds. You should be able to do this in a number of ways, and if you’re struggling it’s vital you ask your bank for help.
Who Can Open a Business Bank Account?
It’s not just huge corporations that can open a business bank account. Even if you run a tiny, one-man-band sole proprietorship, you can still open an account – as long as you have the right information, of course. Freelancers, contractors, limited liability companies; all can set up a business bank account to aid in the organization of their finances.
If you’re unsure of whether you can open one, why not contact the bank you use for personal banking to check?
Can You Open a US Business Account As a Foreigner?
If you’re not a resident of the USA, you can open a business account here, although we won’t tell you that the process is easy. It’s a lot quicker for citizens to open an account. This is because most banks require a social security number and US address to open an account, and if you don’t have one of those you may find your request denied.
However, if your business is registered in the US and you have an EIN, you should be fine. It just may be a little more time-consuming than for citizens.
Should You Open a Bank Account Online or In-Person?
If your bank allows you to open a business account online, that’s great! It’s much easier to open your new account this way and you can get yourself set up instantly if you have the correct information.
However, there are perks to going into your bank to open an account in person. You can speak with an employee to ensure you’re choosing the right account option for your needs, ask any questions you may have, and build up a relationship with the staff member you speak to. You never know when you may need a banker to help you!
Either way, it can take several days after you’ve sent through all documentation to receive your cards and have your account activated.
Open a Business Bank Account With Us
At Signature Bank of Georgia, we provide financial services to businesses including showing you how to open a business bank account. With both saving and checking accounts available, our team can help you set up the right services to help you manage your money. To find out more, feel free to contact our team today.
When it comes to banking, we’re always happy to help!