Establishing a business bank account is a fundamental step that every business owner needs to make. However, juggling daily operations and other business-related activities are already more than enough to occupy most of their time, sometimes leaving the business banking aspect ignored. For entrepreneurs who are new to the business industry, handling business banking relationships can be an overwhelming task, especially if they don’t have any prior experience.
Proper management of finances is a key component in ensuring that the cash flow of a business is systematised and that the business is not about to experience a sudden monetary fiasco. Keeping up-to-date with their financial status helps business owners avoid incurring unexpected debts and be able to make key investments and expand their business the way they want to.
This article offers some useful tips on how to have your business finances organized and in working order:
Open a business account in a community bank
Especially useful for small business owners with local operations, opening an account in a community bank or credit union lets them enjoy a host of the same services that a big bank offers, but at more affordable rates. Community banks also offer better customer service and more flexible banking solutions for business owners compared to bigger banks. Some are even mission-based, non-profit institutions that help the community develop and prosper. However, it should be noted that not all community banks and credit unions are the same. Do your research to find the best community bank with a good reputation that fits your business needs and future plans.
Build a good relationship with your business banker
More often than not, business owners have little personal interaction with their banker, mostly limiting it to checking transactions and reviewing funds. But what they don’t realise is that developing a good relationship with their banker can actually help not only in financing their business, but also obtaining the business goals of their company. For example, a business owner can enjoy perks and benefits such as reversed fees or even a limited time overdraft protection when their finances are running low, all because they have a good functioning business relationship with the bank. What’s more, good bankers are well-versed with the local economy and the business industry, so they can give advice on how to tackle various business challenges and recommend strategic moves that will benefit or help your company progress.
Keep private expenses and business expenses separate
It is crucial for business owners to have a separate business bank account and private bank account. That way, personal and business spending are separated in order to avoid financial catastrophes such as unaccountable losses, combing through personal and business taxes, and threats to liability protection. Moreover, it helps business owners keep track of their business expenses and evaluate their financial needs.
Have your accounting managed by a competent CPA
Most of the time, business owners wear different hats and have their plates full. Getting help from a qualified and proficient accountant to manage the accounting of your business will help relieve the load of attending to payroll and taxes, which usually takes a lot of time. Furthermore, they can also help with matters like creating a business plan, measuring key business metrics, and giving advice about a company’s legal structure.
Managing the financial aspects of your business can be a tough job, but without having your finances in order, your business will not thrive and move forward. Once you have your numbers in the right place, you can spend more time to the most important things – your business and your clients.