Business Checking Accounts

by Mr. Checking

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For someone looking to start a business there are hundreds of details to work out. Deciding whether or not to open a business checking account is another one of those choices that takes a bit of research and a good understanding of the company’s future. Separating one’s personal finances from their business’ finances is an important step that makes it easier to fulfill a number of tasks, including paying taxes or selling the business later on.

When and Why to Use a Business Checking Account
For many there is still some debate about whether two different checking accounts are necessary for a new company. Depending on the business structure and how large the business is, separate checking accounts might not be needed for someone who is able to keep track of their records very well. For those who have more difficulty keeping track of the minutia or those who have a business with additional employees, utilizing a business checking account is a good idea.

Using a business checking account also makes new start-up businesses appear to be more legitimate. Those who begin their company without a separate checking account run the risk of their business appearing more like a hobby rather than a fully functioning entrepreneurial endeavor. This is especially important for those people beginning businesses born from a hobby or personal interest like crafting.

In any case, there are many benefits for businesses of all sizes to use a business checking account. Whether it is to stay on top of various expenses or lend credibility, taking the time to research the best opportunities is a good idea. Different financial institutions will offer unique options for those using their bank for checking or credit purposes. Deciding upon the best institution can be a tough choice, but some special considerations will help the decision making process take far less time.

Deciding Upon a Business Checking Account
Just as when someone inquires about opening a personal checking account, it is equally important to peruse the options available for business checking accounts. Things to consider include whether or not the bank has a well functioning online interface, or even if the institution offers additional programs for businesses. Every little bit that will help make the company function better counts as a reason to choose that particular service.

Checking the services available to businesses is one of the best places to start when looking to open a checking account. Some companies offer options like payroll services or credit-debt processing services for those companies that need a varying volume of services. Many institutions also offer a variety of services based on the size of a business. Those companies that experience a low volume of cash flow can function well enough on more basic service packages, while those companies with high volume expenses need additional assistance keeping track of their money. There are also specialty business checking accounts for non-profit groups.

Ultimately, the account needed depends on the size of the company and how much money is moving in and out of the bank account. As the business grows more options are available to meet the needs of the business. People interested in starting one of these accounts should review the bank’s websites or visit a local branch for a consultation.

Setting Up an Account
Once the best account type has been chosen, one must gather together the information necessary to open a business checking account. Most banks will not allow a business account to be opened without proper documentation proving the existence of that company. Before going to open an account, have the following items available:

-Proof of Existence: There are many items that can fulfill this requirement, but it varies depending on the bank’s policy. Some items that are accepted include the company’s Articles of Incorporation, Certificate of Formation, or Trade Name Registration.
-Employer Identification Number (EIN): This number is a tax identification number given to a company for free by the IRS. For all intents and purposes, this number acts as the social security number for a business.
-Personal Information: The person opening the account will most likely be required to offer personal forms of documentation in addition to business documentation. Be sure that a copy of the state license or personal ID is available, in addition to a social security number.

Once all of the information is gathered, a visit to the bank is might be necessary. Some companies offer online applications while others require a visit to the office.

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