Planning Weeks 9-10

Set Up Your Business Bank Account

Banks are competing hard for your business account. Use this to your advantage.

Unless you intend to keep your company’s cash under your mattress, you will need to set up a business bank account to hold your revenue and provide quick access to it to pay bills.

During this decision, we will cover the basics of bank setup and discuss how you go about accepting credit card payments.

Banking costs

In most large metropolitan areas today there are too many bank branches for the number of residents.

As a result, there is a pricing war going on between large chain banks like Chase, Bank of America, PNC, etc.

One of the deals many offer is free business checking accounts, and sometimes they even pay for your first 100 checks.

But, there is often a catch. These accounts are aimed at what are known legally as “sole proprietors” or single owner businesses.

Now, with younger clients we often advise them to start out as sole proprietors and then evolve into a corporation or LLC as their businesses grow. This way they can keep some expenses, such as bank charges, low or eliminate them all together.

We specialize in working with start-up clients over age 50. And at that point of life it is usually advisable to start the business as a corporation or LLC to provide maximum protection of personal financial assets right from the get go.

A consequence of this choice, however, is that corporations and LLCs rarely are offered free business checking accounts. Typically the banks charge for every check that clears the account as well as each deposit made. A typical monthly charge runs $8-$15.

How to pick your bank

If you live in a typical metropolitan area chances are good that you have a half-dozen or more different bank branches within a mile or two of your office or home location. And chances are also good that they offer very similar types of accounts with similar fees.

So, often your choice of business comes down which one makes you most comfortable. And this may mean selecting as your business bank the bank you currently use for your family banking.

Accepting credit cards in payment

Online stores today all offer payment by credit card or via Pay Pal.

If you are planning to launch a product-selling company you are most likely already not only aware of this situation, but you know something about how to do it.

If you are offering a service or consulting advice, it may not have immediately sprung into your mind that you may wish to offer the option for your customers to pay via credit card.

How to set up a merchants credit card account

Click here to learn how to set up a merchant credit card account.

QuickBooks and check writing

As part of opening your business checking account, the bank account rep will likely offer to have checks printed for your account.

We suggest that you not take them up on this offer.

Why? Because you will end up paying quite a bit more for the checks than you need to.

Now, there is also another consideration in deciding in how you will use checks.

One of the most powerful features of QuickBooks is that the program memorizes every transaction you enter, the first time you enter it. And the program contains instructions sent to your printer to use the information you have entered, such as payment to your cellphone provider, to control the printing of the check.

However, in order to use this feature, you must buy a special kind of check – three on a page – so that your printer will handle the job properly.

There are two options for ordering business checks:

1. Use the pocket-sized style check, like the ones you use for your personal account.

Note

Now, if you choose to use the smaller, single checks you will need to type in each transaction into your QuickBooks program if you wish to keep your records up to date.

2. Use the three-to-a-sheet QuickBooks-compatible checks.

As mentioned earlier, using this type of check permits you to record the transaction in your QuickBooks program and print the check in one action.

Click here to order QuickBooks-compatible checks from NEBS.com.

Great Web Resource
INC.com
“How to Choose the Right Bank for Your Small Business”

Click here to read article.