The financial aspect of owning a small business is a critical component to its overall success. As you progress in your endeavors, it is likely that you will come to find that your business requires a vast array of financial services, accounts, and credit products. In fact, every aspect of your business is dependent on financial tools.
It does not matter if it is related to obtaining inventory, hiring employees, day-to-day accounting, reporting to the IRS, reconciling accounts each month, or accepting payments from customers – all of this depends on financial tools. Additionally, the financial side of your business plays a direct role in the success or lack of success that you experience. In this brief guide, you will learn about a few financial tools that will set your small business up for success on all levels.
A Business Deposit Account
Many first-time small business owners make the mistake of using a personal deposit account. This should be avoided. Each must be kept separate. You need an account where authorized individuals may handle the day-to-day finances without delving into your personal account. Having a designated business account will help to ensure proper recordkeeping. Additionally, there are many services that are available for business accounts that are not available for personal accounts. Examples are as follows:
- Contactless Payments
- Business Checks
- Business Credit Cards
When shopping for a business account, it is important to know and understand that they are not all alike. When shopping for a new account for your small business, consider the following:
- The Features and Services
- The Interest Rate for the Account
- Service Fees Charged
- Branch and ATM Banking Services and Highlights
- Transaction Limits
- Introductory Bonus Offers
The best accounts for a small business will offer one or more of the following:
- No or Small Service Fees
- Competitive Interest Rates
- Unlimited Transactions for Your Business
- Direct Access to Your Money
- User-Friendly Online and Mobile Banking
We here at Somerville Bank are currently offering accounts for small businesses. Depending on the type of business that you have, you will need to submit certain documents when electing to open your account. These may include a photo ID, Social Security number, an Employer Identification Number (EIN), Certificate for Doing Business As, corporate charger or articles of incorporation, and/or the business license. For more details about the requirements that are necessary, we encourage you to contact one of our branches and speak directly to a specialist.
Good Credit History
As a small business, it is important that you maintain a good credit history. Eventually, there may come a time when you need credit. Having a good credit history will allow you access to a larger assortment of credit products and services. Furthermore, it will allow you room to negotiate terms on any loans that you may need to take out.
The credit history of the business is based on your personal credit. For this reason, you should always make sure that you are taking the steps necessary to improve your personal credit score.
Monitor your history record on a regular basis. This will help safeguard you against unexpected issues, expenses, and even identity theft.
Avoid Scams
There is a new breed of scammers out there. These prey on small businesses and thrive on exploiting those businesses. You should stay up-to-date on all of these. In doing so, you are protecting your money, the financial livelihood of your business, and your overall success. The following outlines the most common scams targeting small businesses at this time:
- Phishing – This is when scammers utilize email to obtain financial information. The email may appear to be from a trusted source, such as a bank or government agency.
- Smishing – This is when the scammer uses text messaging to obtain financial information for the purpose and intent of committing a crime.
- Vishing – With this, scammers use phone services to attempt to trick someone into providing personal or financial information.
- Ransomware – This is where malware locks or encrypts files on an electronic device and a ransom is demanded in order to unlock that device.
- Mail Scams – This works much like phishing, smishing, and vishing, but the scammer attempts to obtain information through the mail system.
The following steps should be adhered to in order to protect your small business from identity theft and other issues committed by scammers:
- Always operate your business with an Employer Identification Number (EIN). In doing this, you will experience the highest level of protection as a business owner.
- Make certain that all electronic devices have a firewall, anti-virus, and anti-malware programs installed so that you may secure all of your sensitive online files. If you store offline files, keep them locked and secured so that they are inaccessible by prying eyes.
- Utilize internal controls such as restricting employee access to certain documents, establish protocols for a data breach, regularly change passwords, and store passwords on jump drives so that they are not accessible to online hackers/scammers.
- If you provide information to vendors, learn their information and privacy practices. Remember, all information should be adequately protected. If it is not, choose another vendor who values your privacy.
- Regularly check all of the statements and the profiles that are directly associated with your small business. For more information on this, visit BusinessIDTheft.org.
Contact Us Today
If you want to ensure the overall success of your small business through your finances, we here at Somerville Bank can assist you. We offer a wide array of services and solutions that will keep your business safe, secure, and running optimally. Our financial institution has 112 years of experience in working with consumers and businesses. We can offer your business a business account and commercial lending. We also offer mobile banking, online banking, and identity theft services. If you are in the market for personalized banking built for the business owner, visit us at one of our many locations today: https://somervillebank.net/locations/
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