When it comes to business, it is a good rule of practice to separate aspects that are professional from those that are personal. While that is not always possible, it is a must-do for finances. Establishing a commercial bank account for your business is a good first step. Here we look at the reasons why.
First: What is a commercial bank account?
A commercial bank account is basically any type of financial account that a business or corporation uses. These can be savings accounts, checking accounts, and merchant accounts. Instead of earning interest on these accounts, businesses get earnings credits, which are based on the average account balance. While personal checking accounts are often free, business accounts typically are charged a monthly service fee. In addition, interest rates on commercial bank accounts may be lower than what you might find with a personal account. Still, by opening a commercial bank account your business can achieve three important goals.
Manage your everyday finances
A commercial bank account provides a means to manage your business finances separately from your personal ones. This is important for your overall business accounting. It can also make processes easier at tax time and can reduce your personal liability on the account.
A commercial bank account often has features like online banking and mobile banking. This gives you the ability to view banking account balances, transfer balances, and pay bills directly from your computer, smartphone or tablet.
Another everyday transaction that a commercial bank account can help with involves credit card processing. If your business accepts credit cards for payment, a merchant bank account can be used to front your business the proceeds from credit card payments before the charges are, actually, processed through the card issuer.
Set your business up for operations and growth
A commercial bank account can also give you access to other banking products that can help your business thrive. These can include:
- Loans and other credit products, such as equipment or working capital
- Treasury and cash management services
- Commercial real estate services, including portfolio evaluation and debt and equity structuring and
- Employer services such as payroll processing and administering of group retirement plans
Provide access to your employees
Finally, a commercial bank account expands access to your finances to your designated employees. This means you can get support with depositing funds, making payments, and managing accounts. This can be imperative as your business grows and you need more people to take on management and accounting tasks.
At Guaranty Bank, we are happy to always answer any questions that you may have about any and all account options. Contact one of our local branches to schedule an appointment. to schedule an appointment!