Accounting for Small Business Articles, Tips, & Tools

Clients can write checks out to the business, rather than to a personal account. Having a professional account may also mean securing better deals for your business, not the least of which is being approved for a business loan. Opening a bank account for a small business is an essential step to help manage the business and keep its finances in order. If you’re a small business owner looking to find the right business account, here’s where to get one, what to look out for and how one of these accounts can help you. For a small business, accounting involves tracking money flow in various forms, including operating expenses (e.g., marketing, utilities, rent), cost of goods sold, accounts receivable and sales.

If you fall into this category, you might be thinking about where to open a business account. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. While we adhere to stricteditorial integrity,this post may contain references to products from our partners.

Accounting consists of tracking financial transactions and analyzing what they mean for your business. Small businesses hire accountants to advise them on their financial situation and help file taxes. Aside from handling taxes and compliance issues, they can help you optimize budgets, spot opportunities to save, and even apply for business loans. Accounting requires meticulous record-keeping and financial transaction tracking year-round. Moreover, keeping accurate records helps ensure your business is prepared to file taxes, present information to investors or even apply for a loan. We believe everyone should be able to make financial decisions with confidence.

Compare business checking accounts

Knowing how to handle these two items will ensure that your business runs smoothly. Before you can start recording any financial transactions, you’ll need to create a chart of accounts for your company. The chart of accounts is a list of accounts in your general ledger that will be used to record financial transactions. But even if you’re ready to find an accounting software application that’s right for your business, there are a few other things you need to do first. John and Kelly also open a credit card account, which they’ll use to make business-related purchases and build a credit history. They can use the line of credit in an emergency to keep their business running smoothly.

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1. As the name suggests, a high-yield business checking account usually offers a higher APY than a standard business checking account.
2. If you want to use paper checks, your first set of 50 checks is complimentary.
3. Some banks may ask to see additional information about your business, like your business website and business license.
4. Opening a bank account for a small business is an essential step to help manage the business and keep its finances in order.

Account holders can earn 1% cash back on qualifying purchases which can be redeemed as statement credit. All of the banks and financial technology companies listed here offer outstanding business checking products. Some providers even have full-service banking while others specialize in certain aspects of business banking. Understand what you need from a business bank, compare the offerings and fees of each provider in this guide, and choose the bank that best meets your business’s current and future needs.

Can you open a business bank account online?

Since you will be managing both your personal and your business checking accounts, it’s important to know their similarities and differences. While the accounts are similar, they may operate under different rules, fees and assumptions. With a business checking account, you likely will be handling a wider variety of transactions and the quality of your record-keeping matters more. If you’d like to open a business checking account, you’ll first need to decide which bank or credit union you want to work with. You can then submit an online application for a business checking account and provide the required personal and business information.

Savers can also mail a check, deposit a check through the bank’s mobile app or schedule a wire transfer. The rates and fee structures for checking accounts are subject to change without notice and they often fluctuate in accordance with the prime rate. That said, Axos Bank’s Basic Business Checking account doesn’t earn interest. It also doesn’t offer a long list of business tools or third-party integrations, although it is compatible with QuickBooks. Axos Bank is an online bank, so you won’t have access to branch banking.

The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters. Mary Girsch-Bock is the expert on accounting software and payroll software for The Ascent. If you absolutely want to be connected with hundreds of apps that offer hundreds of tasks, Xero may be right for you. A great fit for e-commerce startups and small businesses, Xero has added a ton of features in recent years, and it offers excellent integration across the board. If you’re not entirely comfortable using a software application, Sage Business Cloud Accounting is designed for you.

Get cash flow projections, monitor transactions and view category balances. Easily view and manage personal and business accounts with just one login. Novo is a digital fintech company that partners with Middlesex Federal Savings to offer banking services.

The best free business checking accounts should have either no or easily waivable monthly fees. Banks that don’t charge monthly fees include Bluevine, U.S. Bank, Novo, Mercury, Grasshopper, Found, and Relay. Banks with easily waivable monthly fees are Bank of America, Chase, and Capital One. In addition to earning interest, the Business Platinum Savings account offers overdraft protection for Wells Fargo business checking accounts and the unique ability to write checks directly from savings.

EverBank Small Business Checking is designed specifically for the sole proprietor and single-member limited liability company (LLC). This is an interest-bearing checking account, which pays 0.50% APY on all balances. The minimum deposit to open a Small Business Checking account is $1,500 and there is no monthly maintenance fee. Entrepreneurs might choose Chase for its nationwide presence and its ATMs that can accept both large cash deposits and up to 30 checks at a time.

Can I Use My Personal Bank Account for My Small Business?

No matter your situation, here are some good choices to get you started. In order to follow the accounting equation, all entries made into your general ledger need to bookkeeper have a debit entry and a corresponding credit entry. A good place to start is by reading The Ascent’s accounting tools reviews to get an idea of what’s available.

Small Business Banking & Services

Bank Silver Business Checking Package provides a straightforward business checking account, with no monthly maintenance fee. A $100 minimum deposit is required to open a Silver Business Checking https://accountingcoaching.online/ account. Every small business checking account review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of small business products.

That’s why it’s important business owners don’t keep all their funds stashed in their checking — it’s earning very little in return. Another money market account, the First Internet Bank Business Money Market Savings stands out for offering a high 1.51% APY on all balances. We ranked it the best for sole proprietors, however, because they get ATM card access with this savings account. As a plus, users on the go can deposit checks remotely into their Axos Bank Business Premium Savings using their mobile device. There is also an Axos business checking account available with ATM access.

It also takes into account liabilities, such as accounts payable, business loans and taxes, and the value of your assets, such as cash and inventory. With electronic banking making it much easier to manage your bank accounts, you may be tempted to skip this step. Reconciling your bank accounts each month is important and should be done regularly. Enjoy business debit cards with our $0 Liability Guarantee adatext and fraud monitoring services. Plus, if there’s ever an issue, our fraud department is here for you 24/7.

The accounts payable feature allows business owners to automate workflows and delegate tasks. Account owners can connect their Bluevine accounts with QuickBooks Online to easily upload, approve and reconcile bills. Users can also establish subaccounts to budget and improve cash flow management as well as adjust permission settings for each team member. Bankrate.com is an independent, advertising-supported publisher and comparison service.