Opening a new business was both thrilling and yet – a bit overwhelming. The day you flipped the “open” sign or officially contacted your first client filled you with nervous anticipation. Soon after, the financial realities sank in. Thoughts surrounding cash flow, credit card processing, expansion costs, and additional equipment purchases filled you with anxiety.
Getting your financial business life in order by identifying resources early can help you stay focused on why you started your business. Whether you opened your figurative doors last week, last year, or are still in the planning phases, here are five financial accounts you should open now (or in the near future).
If you’re a sole proprietor of a small company, Limited Liability Corporation, or other business entity, keeping personal and business accounts separate is critical to your success. Not only will doing so present a professional image to your potential customers, but it’s necessary for tax purposes. Regardless of your plans to take eligible tax deductions, you’ll be prepared to clearly identify business income and expenses in the unlikely event of an IRS audit.
Business checking and savings accounts can be managed 24/7 using a financial institution’s online banking system.
As your company grows, so should your working capital. Holding business funds in a traditional checking or savings account may work for the short-term, but business owners should consider another account for their excess cash. Money market accounts offer a higher return on savings while allowing the flexibility of a checking account. Businesses use money market accounts to earn a predictable interest rate which is often higher than those available with standard checking accounts.
A minimum opening deposit and balance may be required to earn a high rate of return.
Business plans should outline the steps needed for financial growth. Often, additional funding is necessary to make those plans a reality. A credit account can unlock doors for small business owners in a changing marketplace. Instead of delaying needed equipment purchases, skipping technology upgrades or scrapping expansion plans, a company can use their good credit to reach these goals quickly and remain competitive in their local communities. Funds made available using a business credit account can help stabilize finances and even grow a business.
· A commercial loan can be used to fund new equipment purchases.
· Commercial real estate loans can cover the cost of remodeling your workspace or the purchase a new location.
· A business line of credit can resolve short-term or day-to-day cash flow needs.
· Business credit cards can help you achieve a variety of financial goals, which may include:
- Building business credit
- Separating business and personal expenses
- Monitoring employee spending
Having ready access to additional cash allows you to reach your financial goals on a timetable that aligns with your business plans.
Only accepting payment by cash or check may work in the early stages of your business. But, as you expand your customer base and include higher priced products or services, accepting credit and debit cards can make payment more straightforward for you and your customer. Simplifying payment helps you remain competitive with other businesses and provides for a more satisfying customer experience. The less complicated it is for customers to pay for higher priced items, the more potential profit for your business.
Position your company for long-term growth by learning which fiscal resources are at your fingertips. Contact a Community Credit Union representative today to discuss which Business Banking accounts can meet your financial needs.