By December 21, 2013 0 Comments Read More →

Set Up Your Bank Accounts

Set Up Your Bank AccountsYour choice of where to set up the bank and payment card accounts for your new business could have a big impact on daily convenience. You should choose carefully, since it could become difficult to move accounts as your business grows.

It’s often easiest to create separate, linked business accounts at your current bank. But before you do, take a serious look at whether your personal bank is a good choice for your business.

  • Be sure that your bank uses multi-factor authentication to help protect your money from thieves. Multi-factor authentication typically requires you to reply to an automated email any time you try to access your accounts from a computer or browser that the bank doesn’t recognize. Many of the nation’s largest banks still don’t offer this basic protection, and so could put your finances at greater risk.
  • Confirm the checking, savings, and payment card accounts all allow QuickBooks Web Connect (*.qbo) statement downloads (as opposed to only Quicken downloads). This can free you from entering transactions by hand or importing them with less reliable methods.
  • Be sure that the bank provides a free or low-cost business checking account, in addition to a higher-interest savings account where you can move any funds that aren’t needed to pay bills.
  • Ask if your business checking account will have an online bill payer feature to save time when you need to pay supplier invoices by check.

When setting up your new business account, the financial institution will require you to bring the forms you received when you registered with your government, including your business registration, EIN number, and so on.

As you set up your new business accounts you’ll need to transfer in some personal funds to get started. You should also consider getting a checkbook to pay some of your suppliers’ bills.

Paying some supplier invoices by check – as opposed to prepaying by payment card – can be an important way to build a credit history for your company. Even if you never really need to buy items on credit, some future suppliers may ask you to provide references from other vendors whose invoices you’ve paid on time, by check, before they’ll do business with you.

Get a Payment Card Right Away

I personally hate having too many credit cards, and resisted getting a payment card for the new business right away. This was a big mistake: not only does the IRS expect you to consistently charge business expenses to a separate card that’s solely for your business, but use of a business payment card can start saving you money immediately.

That’s because a separate business payment card makes it easier to charge every legitimate expense to your business. This could save a lot of time separating business from personal receipts, and helps ensure that you claim every business expense to save you on taxes.

NoteBe aware that using a personal credit card for business expenses could impact your credit score. A mortgage lender once told me that my credit score fell by around 30 points because a single, personal credit card account that we use to pay monthly advertising expenses often exceeds half its limit, even though we pay the balance in full each month.

Now that your accounts are in place to pay business expenses, it’s time to set up your website.

Next: Set Up Your Website

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