Breaking down the process into small individual tasks
When taken as a whole, the seemingly insignificant tasks involved in beginning a new firm can frequently add up to an apparently difficult procedure. It’s crucial to keep in mind that the majority of these chores are actually quite little, and approaching them as such makes things appear to be much simpler. I’ll concentrate on what I looked at in my case to set up my company banking accounts in this article.
Prior to setting up my banking accounts
I had to finish a number of other smaller jobs to get to this point so that everything was prepared for setting up my business banking accounts. This involved establishing my business address, completing and obtaining my limited liability company paperwork from the secretary of state’s office in my state, applying for and receiving my Federal Employer Identification Number from the IRS, and setting up my business address.
I had to keep all of my first expenses as low as possible as I did not yet have any meaningful income coming in from my new business. In this situation, finding a business banking structure with reasonable, ideally zero, fees is the goal. Spending money on things like ongoing unneeded banking fees while I’m still establishing up my business is the last thing I want to do.
What I needed in a business banking account
I began by doing a little internet research to find out what was needed to set up company banking accounts. Since there is a ton of readily accessible information out there, I’ll just list the procedures and choices I made for my unique setup. I needed a couple things from my business banking account in addition to low monthly fees.
- A local convenient branch location
- A national chain with many location
- A good on-line banking service
- The ability to add on a multitude of business services down the road
- Low or no recurring monthly business banking service charges
A convenient branch location
I’m happy to report that I was able to locate all of these items in my neighborhood. Because I don’t want to have to go far for my banking needs, I sought a nearby branch location that was convenient. This is a time management issue for me. In the past, when choosing personal bank accounts, I made bad decisions because I assumed I would be doing the most of my banking online and didn’t really need anything nearby or more practical. Even though I handle the most of my personal banking online, there are still occasions when I wish I had gone with a bank that was closer when I needed to visit the bank in person. I anticipate needing to physically visit my business bank considerably more frequently in the future than I need to for my personal banking needs, depending on the types of deposits I will need to make.
A national chain with many locations
In order to increase my chances of finding a local branch of the same bank should I decide to migrate personally or start a business in another location, I wanted to choose a national bank with numerous branch locations. This would entail that I wouldn’t have to go through the effort of opening new accounts at a different bank in order to preserve the same convenience of having a nearby branch location. Instead, I could keep my current accounts with the same bank.
A good on-line banking service
One of the most important factors I had when selecting my bank was having a very strong online banking service. I want and expect very good online banking services in the modern world, including online bill pay, statements, account funding transfers, the consolidation of all accounts into a single location for simple viewing, and most importantly, built-in functionality to quickly download my accounts into accounting software like Quicken or Quickbooks.
The ability to add on a multitude of business services down the road
One of the most important factors in my decision to choose my bank was having a very nice online banking experience. I want and expect very good online banking services in today’s world, including online bill pay, statements, account funding transfers, consolidation of all accounts into a single location for simple viewing, and most importantly, built-in functionality to download my accounts quickly into accounting software like Quicken or Quickbooks.
Low or no recurring monthly business banking service charges
One of the most crucial factors I was thinking about at this stage in the early creation of my firm would be last on my list. At this moment, I must only need to keep a small amount in my company banking accounts with little or no ongoing monthly service fees. I wouldn’t be opening my accounts with a large sum of money, and I didn’t want service charges to gobble up the money I was depositing into them. I required an account that would enable me to maintain a low minimum balance while also preventing as many costs as possible.
I might. For personal banking accounts, many banks don’t have minimum balance requirements or monthly fees, although this is typically not the case for many corporate banking accounts.
So how did I do?
I ultimately decided to create a business checking account with Chase Bank. They had a convenient branch location close to my house and directly across from my company’s mailbox at the UPS Store, which is also now my official business address (See my article on Getting My Business Address.) They matched my convenience requirements and are a well-known national financial organization with numerous branch locations around the country. This means that if I decide to move, there is a considerably better chance that I will find another branch nearby.
They have a very rich on-line banking service that met all of my requirements for on-line banking abilities, and easily integrated with my Quicken software. They offered many business financial services which were available to me, but at this time I do not require them. It is nice to know I can get these services in the future with them. Most importantly, they were able to structure my accounts so that I do not have any monthly service fees or minimum balance requirements, NONE!
How did I avoid fees?
Through their program, I was able to open a business traditional checking account without paying any fees as long as I kept a higher account level than I typically would have. By requesting a business credit card account and connecting it to my business bank account, I could avoid the fees. I wouldn’t be charged for a business checking account as long as I used the credit card for my business at least once a month. I am aware that many people will ask this query. How about the costs for business credit cards?
I checked to be sure there were no yearly or other hidden costs associated with the company credit card. Not at all. I did, after all, ask several times. There were additional advantages to owning a company credit card that, at first, I did not value as highly. A credit rating for my company that was separate from my personal credit history was one of these advantages. This is crucial because in the future, the company might be able to get loans without me personally being held responsible for the loans I make for the company. Better fraud protection when using a credit card online as opposed to a debit card is another advantage of using a corporate credit card.
It was simple enough for me to guarantee that I use my business credit card for at least one purchase each month. I easily configured my internet hosting company to charge the monthly hosting fee for the company to my business credit card. This guarantees that even if I decide to use my debit card, which was also fee-free, or checks from my checking account, there will always be at least one charge on the credit card to satisfy the bank’s requirements for waiving all of my business accounts’ service charges. I don’t think it’s a horrible bargain.
What paperwork did I need to setup my accounts?
The client service for setting up my business banking accounts was excellent, I must say. Without making an appointment, I simply strolled into the branch office, and a representative from the business banking division met with me right away. I was small-time when it came to my business at this stage, and I made that obvious from the start. They still treated me as if I were a bigger company. They spent the necessary time answering all of my inquiries and explaining everything. I immediately received approval for a company credit card with a very generous limit. Although I don’t really intend to use the card to carry a balance, it was wonderful to see that I was approved for a respectable line of business credit.
My personal identification, the employer identification number I obtained from the IRS, the certificate of filing from the Office of the Secretary of State in my state, and my LLC operating agreement were all I required to open my accounts. I received all of these paperwork when I used LegalZoom.com to register my LLC, with the exception of the personal identity document of course. I could have finished the assignment without making any more trips to the bank for supplementary documentation because everything was in order and I had all I needed with me.
Conclusion
You may simplify the seemingly complex process of starting a business by breaking it down into a series of short, straightforward steps. Before I even entered a bank, I understood what I wanted to achieve and what I required for this step of setting up my business banking accounts. I was able to finish this activity without a headache or a frustrating incident by organizing my paperwork and completing some homework beforehand.