May is Small Business Month, an opportunity to recognize the impact small businesses have across our communities. Small businesses are the economic engine that moves our communities forward. And this month, Regions Bank is highlighting an important topic for small-business owners: Checking accounts.
Separating your business finances from your personal funds is a key step in the early formation of a small business. Compared with all you must manage to get your business off the ground, opening a business checking account may not seem like a priority — even more so when revenues are scarce, and you’re covering startup expenses with personal funds.
Don’t ignore this important step- a separate checking account for the business is essential:
- It separates your personal assets from those of the business, which generally is a separate legal entity.
- Payments made to your business cannot be deposited in a personal account.
- It simplifies the business’ bookkeeping for day-to-day matters, calculating profit and loss and tax reporting.
Perhaps just as important, a small business checking account is the first step in your relationship with a business banker — a valuable connection as your company grows. When you require services such as credit, loans and cash-management expertise down the line, you’ll already have a strong connection.
Deciding On an Account
Before you determine where you’ll be making your initial deposit, weigh the potential value and importance of several factors, such as:
- Debit card availability
- Access to a savings account or other complementary accounts
- The ability to process customer payments via credit card or ACH
- How close the bank is to where you’ll be doing business
- The reach of the branch or ATM networks
- Minimum account requirements
- Fees on accounts and transactions
- Extent of online account access to facilitate transactions and record-keeping
Some of these considerations may seem excessive now, but your business and its banking needs will evolve. For example, if you plan to build a regional company with a transactional business model, a bank with branches or ATMs in multiple communities would be beneficial.
Before You Head to the Branch
Unlike opening a personal bank account, you’ll need to finalize some paperwork before you take the reins of your business checking account. Before heading to the branch, double check with a bank’s small business specialist to determine what documentation is needed to open the account. Based on the business, different documentation will be required.
Once your business accounts are in place (and the business can take payments and keep company finances separate from your personal funds), congratulations, you’re in business! No matter what stage your small business is in, Regions Bank can help with guidance and insights based on our experience. Stop by our Taylor Road branch or any Regions Bank branch across Central Alabama to speak with a banker to learn more.
