New small business owners must find smart and savvy ways of keeping their business running successfully and one of the best ways is to ensure that you’re managing your finances the right way. This article discusses five common ways of better managing your online banking as a new small business entrepreneur.
Your personal Online Banking Provider may not be the best choice
New small business entrepreneurs often make the mistake of opening a business bank account with the same bank as their personal account. While it is understandable that convenience trumps everything, you may incur hefty monthly costs or transaction fees if you decide to do so.
You could potentially be foregoing hundreds of dollars in savings which can otherwise be reinvested via monthly savings.
Consider opening an account at a community bank or credit union
Community banks and credit unions are good for two things when it comes to opening an account for your small business: great customer service and affordability. Smaller banking institutions are often more dedicated to build a sense of community with their customers.
In fact, many of these institutions are mission-based not-for-profit banks that largely focus on community development. Just make sure the community bank or credit union operates in areas where you are likely to expand the business.
Always a Good Idea to Research Your Potential Bank’s Reputation
Don’t hesitate to talk to your business contacts and others in your network to see how their relationship with their online banking provider is working out. Entrepreneurs are all too eager to share their online banking experiences, especially if they happen to be negative.
Most of your contacts will be generous enough to discuss how good their lending process is or whether they are good for acquiring credit. You should ask them about not only your potential bank’s reputation but also how well they support new small business growth.
Avoid Mixing Personal Expenses with Business ones
While it can be tempting to use your existing personal credit card to finance your new small business, it is generally ill-advised – business cards exist for a reason and this shouldn’t be taken lightly. For one, keeping your personal and business expenses separate will make tax calculations easier. Additionally, it will also make record keeping a lot easier and generally keep your tax person stress-free. Not only that but make it easier to establish your business’s credit rating and future borrowing. For a fact, business credit cards offer certain rewards that are geared toward small business.
Establish a 2-way relationship with Your Online Banking Provider
For the most part, small business entrepreneurs have a somewhat ‘limited’ relationship with their banks – that is, mostly interacting during every day checking transactions like debits and deposits. However, a good two-way relationship can benefit your small business in a number of ways – having fees reverses, receiving temporary overdraft protection if you’re running low on funds, getting a small business loan more easily, etc.