Business Bank Accounts | How to Start/Run a Successful Commercial RealEstate/Construction Business

Business Bank Accounts

You are an entrepreneur, and opening a business bank account is one of the first things that you should do when starting a business, certainly before you receive your first contract or pay your first business bill. In order to cash or deposit a business check, you must have a business checking account with all of the legal and tax identifications or numbers, your business name, and all your company information attached to it. You will receive business checks you can use to pay taxes, employees, and bills.

Any business check you receive from your customers for services you have completed has to be deposited into your business account. The only way for you to turn it into cash for your business is to deposit it and wait for it to clear. Whether it’s from in-state or out-of-state will determine how soon the check will clear. The company that has given you this business check will always make it out to your company name, not your personal name. A business bank account is crucial also for keeping your business money and personal money in order and separate. Keeping good records is very important to your business success, and this includes keeping all banking statements organized in a secure place that is readily accessible.

Track information on your account in an orderly fashion, whether it is on a computer, with your bank, or in your locked file cabinet. Again, you can’t do it all yourself, so hire an accountant or financial advisor to handle your business bank accounts as well as your accounting for you. Every bank account should be given the same amount of respect, whether the funds are large or small. Have a set of folders or a database dedicated to each of your clients. Records about checks, deposits, and money information should be kept separately for each customer and each building you clean with the dollar amounts you receive attached to that client’s record. This way, you will see whether there is a large or small profit being made per customer and what adjustments you must make, if any, to make a profit each quarter. If you lump all of the money from all your jobs together each month without keeping job-specific records, you will make it difficult to figure out which buildings or contracts are making money and which ones are barely breaking even. Then you will have to wait until the end of the quarter to find out where you stand financially, and this can create problems with your cash flow.

You can pay your business payroll, upgrade equipment, and hire and pay subcontractors, all from your business account knowing that most of the records are kept in order by your bank as well. Ask your accountant about a good payroll service for you and your staff. The Automatic Data Processing Service (ADP) is just one of the payroll accounting services you can contact for help. You can visit them at www.smallbusiness.adp.com for one of the best ways to help keep track of all employee payroll and tax deposits. The start up cost with ADP is about sixty dollars per payroll. The thing I like best about this type of payroll service is that they will deliver your payroll checks right to your home or office each week. After you call in the hours worked or salaries for each employee, your company paychecks will be in your possession and ready for your review within twenty-four hours. Then all you have to do is pass them out to your employees. This service will help you keep your business records clean and clear so payroll taxes are not complicated or missed used.

You need to conduct yourself as a business professional at all times when doing business with your bank. Your business bank account will give you credibility when you want to ask for bank loans or get someone interested in investing in your company. Your business account may make it possible for you to set up a business line of credit with your bank. When you are waiting for customers to pay you and your bank account is low on money, your employees will still need to be paid. A business line of credit will allow you to write business checks to pay your employees and business bills for thirty to ninety days until the money comes in. You can use your line of credit when your cash flow is slow or tied up and money is needed to grow or start on a new contract. With a business line of credit, you will be able to make payroll and buy supplies without losing your mind or going out of business. You will arrange with the bank to repay the money from your line of credit with your next bank deposit and, maybe, some of your profit. If you did not have a business line of credit, it would not be easy to take advantage of new business opportunities offered to you when your business bank account is low. This is especially important when you are just starting out.

Do not merely run out and open a business bank account anywhere. Take time to do a little research. Business accounts are not like personal accounts where you show up at the bank with your personal identification card and the bank cashes your paycheck for you for free. The first thing you will discover about business accounts is that financial institutions sometimes charge the business customer a small fee, unlike most personal accounts. There is quite a lot of variety in the fees attached to business accounts by different banks. You can read the banks’ literature and also ask your accountant which bank is the best for you and your business banking needs.

You will find that some of your cleaning customers will mail their payments to you while others will put them on their front desk for you to pick up each month, or whenever the check is ready. As a busy businessperson, you may sometimes have to do your banking on weekends or at the last minute, maybe even on some nights. Some bank branches have flexible night and weekend hours while others are open seven days a week with good night hours. For example, TD Bank is open seven days a week, and until 8 PM at the drive -through on week nights. You can call them at their toll-free number, 888-751-9000 or pick up free booklets full of information about the bank at their branch offices.

Please note that flexible hours are helpful, but they will not solve all of your banking problems. If you need to make a payroll deposit at seven in the evening and the bank is open until eight, you should be able to make your deposit. However, every bank takes some time to process deposits; they are usually not available for you to draw on immediately. So if you make the deposit on late Monday or Tuesday, you will be able to pay your employees on Friday. But if you make your deposit on Wednesday night, you may not be able to pay your employees on Friday unless you have a line of credit or have a good relationship with your banker. It is worth noting that some flexible banks, like TD Bank, seem to believe in small businesses and are helping us with their SBA Express Loan programs. You can borrow up to $150,000 from them, and choose the financing option that best fits you and your business. To get a SBA Loan Application Kit from TD Bank, call 888-751-9000 to get the ball rolling.

You should also have your own personal account where, with the advice of a good financial advisor, you deposit money you pay yourself, pay personal bills, purchase household items, and save for your future. This personal account should never be drawn upon to finance your business once you are set up, no matter what. Your business account can and will be self-sustaining, and it will soon begin to add profit and money to your personal account. Invest and use this profit wisely, keeping your future, retirement, and where you came from (your nine-to-five job) always in mind, no matter how much money you have in your bank accounts.

If you want to increase your business and you do not have the funds to do so on your own, you may want to consider bringing in an investor. Keep in mind, though, that if you accept money from an investor, you will have to share some of the profits from your business until the investment is repaid in full.