A business bank account makes it far easier to separate your personal finances from your business finances. However, it’s important to remember that choosing the right small business bank account can be a complex issue. You need to make sure you choose an account that matches up with the needs of your company. These are some of the most common mistakes that small business owners make when setting up a business bank account.
Choosing the Wrong Banking Partner
Business bank accounts are not the same as your personal bank account. You’ll have different banking needs as an individual and as a startup.
When you choose the banking partner for your business, some features that you want to have to include startup-friendly fees, reward programs, accounting integration, as well as vendor payouts, and payroll management.
Choose a business bank account that can help you with your business growth.
Taking up Bank Loans
One of the most common banking mistakes is taking bank loans when you don’t actually need them for your business. Many banking partners will offer you loans, but this doesn’t mean that you have to take them.
You should first ask yourself whether your business needs a bank loan. Bank loans often have high-interest rates. When you’re early into the business, this could lead to very high risks for your business and also hurt your credit score.
Choose a Business Bank Account that can Help You with Your Business Growth.
Not reconciling your bank accounts
Reconciliation is a process done to make sure all your financial records are accurate to your actual transactions.
To do this, you’ll compare your bank accounts with your bookkeeping records. Not reconciling or failing to do so regularly are business banking mistakes.
Reconciling your bank accounts regularly will not only help you detect errors and fraud attempts but also allow you to analyze your records and allocate your resources better based on them.
Failing to automate financial operations
Managing and doing your financial processes take time. One of the business banking mistakes that you don’t want to make is performing all daily financial operations manually.
Your time will be spent doing nothing else but keying in payments. Automation can help you with vendor management, payroll, and taxes.
You can schedule automatic pre-approved payments and even make the whole approval process simpler and faster.
Unaware of the hidden charges associated
Hidden charges can easily add up. When no awareness is not brought to these hidden charges, they could result in a bleed in your expenses. Admin fees, for example, can be quite expensive.
When they’re not considered properly, they could be mistakes. Business bank account providers should be transparent with their fees.
You want to know them up front and be aware of all your fees, including the interest rates and late payment penalties for a credit line that you might take.
Opening a business bank account isn’t as easy as many believe! Don’t make these costly mistakes.
