Once you’ve identified the correct types of accounts for your business, it’s a good idea to manage them online. Paying and dealing with transactions online gives you the benefit of moving your money more quickly than through the old standard method - sending checks via snail mail. Online banking is also convenient when it’s necessary to move money from account to account, as most banks allow you to transfer funds within their institution instantaneously.
Many banks will also notify you of pending transactions, so that you have time to enter money into an account if it looks as though you’re going to be short of funds. The same goes for incoming electronic deposits and wire transfers.
Nearly all banks give you the ability to pay your bills on the Internet. This can also save you the costs of postage and time. However, some banks may charge fees for such services, so make sure the time savings are worth those costs. Many vendors and creditors also offer online payments, at no extra charge.
As we advocated in Step 4, most online banking services also provide a link or downloadable document compatible with common accounting software or can at least transfer it into a spreadsheet. This saves you time that would otherwise have to be spent individually inputting transactions on your part or on your bookkeeper’s part.
Having this feature on your checking account can save you money and a vendor relationship. Overdraft protection can save you $35 to $50 fees on returned checks and help save your credit if a payment to a vendor is impacted. Sure, your bank will charge a fee – about $10 is reasonable – but it’s better than the alternative outcome. Additionally, some institutions will let savings or other accounts cover any shortfalls that come up in your checking account.
Business credit cards
You shouldn’t automatically accept a business credit card from your banking institution. There may be other rates or offers out there that are more beneficial. However, when opening a new account, banks will perform a credit check and oftentimes pre-approve you for one, which is helpful if it turns out to be the card you want.
Lines of Credit
Banks require some kind of asset or guarantee, typically, before providing a line of credit. Expect to be a personal guarantor of any such credit line or to promise business assets against this form of credit.
It’ll probably save you time and help you avoid fees if your personal and business accounts are with the same bank. This way you can easily and cheaply transfer funds between the two. Assuming your venture meets your expectations and generates profits, you just click a few online buttons and voila, you’re headed for the Bahamas.