Just like consumers, business owners have a range of checking account options available to them. Oftentimes, small businesses may run the funds through their personal account. However, this is not the best option since it sometimes becomes very difficult to keep personal and business transactions separate. This can especially become an issue when it is time to file tax returns!
So, my advice is to open a business account as soon as you can. It will help immeasurably with record keeping and will help you keep track of how your business is doing. Most businesses in Maine can handle their finances with one, simple checking account. But some businesses choose to open a second account for payroll. It can be easier to track which checks have been cashed.
A business which accumulates cash, whether over time or seasonally, can open an interest bearing account – which can either be a checking account or a money market account. Typically, a money market account earns a higher rate of interest but has a limit on the number of transactions allowed each month. Very large businesses may opt for a more sophisticated cash management arrangement with their bank. In such an arrangement the bank works with the business to speed processing of receipts and to slow the cashing of checks written to vendors. There are fees associated with these types of account, which are typically offered by the larger banks. Regardless of the type of account you establish for your business it is critical that the statement is balanced each month. Regular balancing of your account is the easiest way to ensure that only legitimate activities are being conducted. Having a business checking account is important, but care must be taken to ensure the account is set up and operating properly. We would be happy to discuss your business checking needs with you and help you on your path to prosperity.