If you're ready to get serious about your small business, you'll want to open a business bank account to manage your finances. However, with so many options available to business customers, it can be confusing to set up a new account. Small business experts shared some of the common mistakes business newbies make with their commercial accounts, and how you can avoid doing the same when opening your own.
Incorrect or missing information at account setup
New small business owners and entrepreneurs frequently make the mistake of bringing the wrong paperwork to the account-opening appointment. Each bank or credit union may have different requirements, so when you book the appointment, ask the banking officer exactly what you'll need to bring to the meeting.
"Don't worry about assembling a great deal of business documents," said David Bakke, small business specialist at personal finance website Money Crashers. "In most cases, all you need is your social number, a tax ID and other general information."
Small business owners also frequently make the mistake of using the wrong tax ID to open the account, said Michael Rozbruch, founder of Michael Rozbruch's Tax & Business Solutions Academy.
"They open it under their social security number, when they should open it up under their Federal Employer Identification Number," he said.
Not having a designated business account
Thinking about running your new business from your existing personal checking or saving account? This could be a big mistake, because it's difficult to track business finances when they're combined with household finances.
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