When you start a new small business, there will be a lot of tasks on your to-do list. You’ll need to establish vendor relationships, acquire a physical location, ramp up your product inventory and launch your marketing efforts.
Before you do any of that, you must have a conversation with a commercial banker. Having the right bank services and products for your small business is essential to your success now and down the road.
There are many bank services available to small business owners, but you won’t need all of them right away. Here are several you should consider on day one.
In the start-up phase, you may be tempted to skip the important step of opening a business bank account. Opening an account that is separate from your personal finances is important for several reasons.
First of all, it is easier to keep track of your business spending and income. This also helps with bookkeeping. Your CPA will appreciate not having to sift through your personal finances when preparing your financial reports or taxes.
Second, it helps you establish a business connection with your bank. If you need credit or financing down the road, your bank can more easily look at your business’s financial history when you apply.
Third, a business account is able to accept credit card payments. Such payments to a personal account usually get denied.
It’s also more professional. If you’re writing checks, having your business’s name on the check will give it more credibility with your vendors and suppliers.
Read More: Why You Should Keep Your Business and Personal Accounts Separate
Talk with a commercial banker for help on deciding what types of accounts are the right fit for your business.
As you get your business off the ground, you may need to finance some of your purchases, but a small business loan isn’t always the right option. In some cases, a business credit card is the way to go.
For example, I recently worked with a new customer who wanted a small business loan to finance new equipment. I told him about the loan process, which included getting three years of financial information from him. After weighing the two options, he went through the simpler process of applying for a business credit card. He was able to buy the equipment and got six months of no-interest payments.
Read More: How To Finance a Small Business With a Credit Card
These days, it’s getting harder to do business without having online access to your bank. With online banking, you can use your office computer or a mobile device to view your accounts, make transfers between accounts and more. Look for a Business Online platform that also has BillPay, which allows you to pay your vendors from your device as well.
Another piece of online banking is remote deposit capture. Instead of letting undeposited checks pile up on your desk, deposit them to your accounts from your computer or mobile device with Remote Deposit Capture. This eliminates travel time and any liability associated with an employee taking the check to the bank.
Many entrepreneurs use Quickbooks for their bookkeeping tasks. If your bank offers this function, you will want to sync your accounts to Quickbooks so that it automatically downloads all of your transactions since your last login. This helps eliminate the process of manually entering them all into the application when making your reports. We offer Quickbooks integration functionality, but if you’re using something other than Quickbooks, we have exporting features that work with other bookkeeping software as well.
If you’re ready to start making sales, you will need a way to process credit card payments. If you have a physical location where you are selling your products and services, you will need an in-house point of sale system in addition to e-commerce payment solutions. The two are usually provided by the same company and are integrated.
Read More: Small Business Online Payment Options
The last thing we want is your new startup business to get hit with check fraud. Make sure your bank has solutions for protecting your business against financial crime. For example, we have a solution called Positive Pay. When checks are issued for payment, you would submit them through the Positive Pay portal. When those checks are cashed or deposited by the recipient, they will be validated against the list of checks you have submitted. If they are there, they will be paid out with no issue. If a check is not on the list, you will be contacted before they receive those funds.
Automated clearing house (ACH) services can be used to pay your employees via direct deposit and to make and receive payments to and from your vendors and suppliers. It is faster and more secure, and it gives you more control over when cash leaves your account. When you send a check, you don’t know when it’s actually going to be deposited and clear your account. With electronic payments, funds settle on the same day.
I recently worked with a small business owner who is on the road a lot and needed a way to pay his employees when he wasn’t around. He started using ACH services to pay them via direct deposit, but he also had employees who didn’t have bank accounts. For them, he started utilizing the Payroll Card, which is a prepaid debit card that integrates with your payroll processing.
Read More: The Benefits of ACH Payments
If you’re a first-time small business owner, take a breath. It’s okay to not know everything. You are already really knowledgeable about the products or services you’re selling.
It’s important to seek help from financial professionals, whether it be your accountant, your legal team or a commercial banker, to get things set up properly, organized and moving in the right direction.
We have a lot of experience with helping small business owners get started off on the right foot. Contact a treasury management representative to see how we can help you today.
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