It does not matter what type of industry your small business is in; your success is hinged on both trust and efficiency. Your business may require many types of deposit-based services and/or products. As an owner, it is quite likely that you are responsible for running your daily operations, and juggling a variety of expenses – such as the costs of operations, expansion, and hired help. You may consider only the best solutions when it comes to banking for your business. Continue reading to learn more.
How Will You Receive Payments from Your Customers?
As a business owner, you must determine exactly how customers will pay you for the goods and/or services in which you specialize. You must figure out if you are going to allow payments with debit cards, payments with cash, payments with credit cards, or a variety of all types of payments. In addition to these options, you may also choose to allow customers to pay with a mobile app. When choosing payment options for your customers, it is essential that you learn as much as possible about fees, limitations, processing services, and other costs associated with those payment methods.
Dedicated Business Account
Now, when you officially start your business, it is essential that you have a dedicated deposit business account and that it stays separate from your personal bank account. This will allow you to track the financial affairs of your business and appropriately track it as the company grows and reaches a new level of complexity.
You may have more than one account for your business, but to make it easier, ensure all of your business deposit accounts are located at the same financial institution. Make sure you open the accounts at a bank that is FDIC insured because this will offer you coverage up to $250,000 for all of the accounts that are owned by your business. Personal accounts should never be used as business accounts. When you have a business account, your customers will be able to make out checks directly to your business. If your business collects data from your customers, make certain that your business is meeting the pre-established legal requirements to protect that data.
Remember, maintaining separate personal bank accounts and professional bank accounts aid in the protection of your assets, helps to ensure that your business is compliant, and makes the overall accounting process simple. Once you register your business with the Internal Revenue Service, and launched your business, you are ready to start making sales. Before this happens, though, you should open a dedicated deposit account at a reputable bank for your business.
By opening a business bank account and other types of financial accounts, your business can improve its business-based credit score and can aid in accumulating credibility with the customers that your business serves. The first step to choosing the proper deposit account is deciding what it is that you need from an account for your business. The account should act much like a business partner in that it aids in the management of the company’s business and puts it to work for your business so that you may dedicate your attention on running the ecommerce-based enterprise that you are attempting to create. You should choose a bank that offers features and benefits that are beneficial to your business.
When working to assess your needs when it comes to your business bank account, use the following questions to help you:
- How much can your business afford to pay in fees each month?
- Do you want to work with a small bank that can provide you with personalized attention on a regular basis?
- Do you want a business credit card?
- How many credit card transactions do you feel your business will have each month?
- Will you need to apply for any type of loan or credit line in the future?
All banks are more than happy to store the money that your business makes, but you will want to work with one that is able to meet the needs that you have now and will work to provide support as your business grows and changes in the future.
The next thing that you must consider are the different types of accounts that are available to your business. Below, we have outlined these types of accounts with a little explanation of each:
- Business Checking – This is similar to that of a personal checking account. When funds are deposited, they are immediately available for use. You can write checks on those funds and even make withdrawals. You may need a minimum deposit and you may be required to maintain a minimum balance. Depending on how much money your business makes, you may also have to pay cash handling fees. You should make sure that your checking account has a high transaction limit and any fees associated with credit card transactions.
- Business Savings – You should work to put money away for your business. You should choose a savings account that accrues interest so that the money you are saving continues to earn money. Review the annual percentage yield (APY)as this will let you know how much interest you will earn each year. The higher this number, the more you will earn. Also, you may be required to have a minimum deposit amount and be limited on the number of transactions that may occur on the account. Naturally, you may also be charged service fees on this type of account.
- Business CD – This is a Certificate of Deposit account. You may choose to hold your business money in the CD. This may have a minimum opening balance, a term or lifespan of the CD, an APY, penalties for early withdrawal, and account fees like a monthly disbursement fee.
Merchant Services Accounts
When you own and operate any type of ecommerce-based store, the payments made with debit cards and credit cards are highly important. Therefore, you must be able to process these types of payments in an economical manner. In this instance, you should use merchant services accounts to help balance between collected payments, processors for credit cards, and the actual companies that issue the credit cards. When looking got merchant services accounts, you should look for those that have secure and competitive rates and provide all-in-one business solutions like payment gateways.
If you accept debit card and credit card payments, you must understand that there are fees associated with this choice. How much fees you incur will depend upon the volume of your transactions and the fees of the merchant service provider that you elect to utilize. This is called the “price structure” the following outlines summaries of each of the main components associated with a price structure:
- Interchange-Plus
- Membership/Subscription
- Flat-Rate
- Tiered
When evaluating the price structure, you must learn about each of the above and review the associated small print to completely understand exactly how you are being charged for the merchant services accounts. The price structures for the accounts available are often considered complicated and they vary greatly in benefits, structure, and features – just go for those that have a high level of transparency in order to protect the finances of your business.
Various Random Fees
When you have your business work with a merchant account provider, you should carefully read the fine print. You must understand that there are many other fees that you may be charged. These are outlined below:
- Transactional Fees – These are small fees that are charged back to the provider that you use each time you process either as debit card or a credit card.
- Scheduled Fees – These are fees such as monthly fees and annual fees, statement and online reporting fees, and even compliance and IRS reporting fees.
- Incidental Fees – these are billed per occurrence. Examples include insufficient funds, chargebacks, and PCI compliant fees and typically do not occur on a regular basis. These fees will only occur every once in a while, when they are triggered by a specific event.
Contact Us
If you are in search of a bank for your business, look no further than Somerville Bank. We provide personalized service and the most competitive rates of any bank in the area. Our specialty is small businesses like yours and we can offer you sound financial advice on exactly what type of accounts you need and what services you should offer your customers. We also offer many services for your business such as business loans, business credit cards, business checking, and business savings. We truly care about your success and will partner with you to guarantee that success. To learn more, you may visit one of our many branches or call us today to discuss what we offer to businesses like yours with one of our trusted financial advisors. Click on the following link for the addresses and phone numbers where we may be reached now: https://somervillebank.net/locations/ By contacting us today, we can connect you with the financial solutions your business requires immediately.
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