How To: Open a Business Bank Account

by: Jen Udan | ChooseWhat.com

You have to have a bank account in order to do business. 

All business revenues and expenses should be run through a bank account set up for that business.  Combining business and personal funds can actually cause you a lot of problems and, in some cases, is against the law.  Therefore, opening a bank account for your business is something you should do as soon as you can.

1. Assemble the information you need. 
   
   

• For the Company:
  
  
• Name of Company
• Physical Address
• Mailing Address
• Business Phone Number
• Business Fax Number
• Certificate of Formation from the Secretary of State
• Federal Tax ID Number (EIN), evidenced by a filed tax return or confirmation letter from the IRS. (*For information, see How To: Get an EIN)
  
  
• For Signers:
  
  
• Company Title (e.g. "Vice President")
• Personal Contact Info: Full Name, Physical Address, Mailing Address, Home/Work/Cell Phone Numbers
  
• Social Security Number (also supply a copy of the license)
• Date of Birth
• E-Mail Address
• Money: Typically, you'll need to make a $100+ deposit to open a new account, so bring your checkbook.

2. Select a bank. 
   
   

• Things to consider when selecting a bank:
  
  
• Cost:  Every bank has different kinds of accounts for different kinds of companies.  Cost is mostly based on the number of transactions (i.e. checks you write and deposits you make) being processed in a given month.  Most banks offer some form of free business account.
• Convenience:  With the advances in technology and online banking, the physical location of your bank isn’t that big of a deal anymore. Many banks now offer remote banking services, such as providing the customer with check scanners were they can make deposits at their office (this is relatively cheap). However, some people may prefer the branch face-to-face model. You should make sure your bank of choice offers all of the online services, check cards, etc. that you will need to run your business.
• Size of Bank:  Large national banks might have branches all over town, or even all over the country, but it’s really difficult to develop a relationship with a large bank.  If you start with a small regional bank, you can get to know the banker in charge of your account, which can be very beneficial.  If you have a problem, you can call someone who knows who you are and can help you. If you want to explore an SBA loan, line of credit or other type of financing, you will have a relationship with a banker familiar with your company and your needs.

3. Open your account. 

   If you’ve done Steps 1 and 2, you’re ready to walk into the branch and sign up.  If you decided to go with a smaller bank, let them know that you selected their bank because you’re interested in developing a relationship and you would like to meet the banker who will be handling your account.

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• Make sure your bank has the ability to integrate with Quickbooks or whichever bookkeeping software you use.  The ability to download transactions instead of manually entering them will save you a lot of time.
• Instead of ordering a checkbook, use your bookkeeping software to write your checks.  You can oder checks that you can load into your printer and print them directly from Quickbooks and most bookkeeping software products.  This will save you a lot of time and it looks professional.