5 Business Banking Blunders
If you’re a busy entrepreneur, business banking solutions can help you gain operational efficiencies and enhance your enterprise’s financial position.
A dedicated account signals to prospective lenders that you mean business.
But too many small-business owners overlook key tools and best practices, leaving cash on the table and, in some cases, putting their hard-earned resources and reputations at risk.
Want to boost your business banking game? Avoid these five common pitfalls.
1. Not Establishing a Designated Business Account
Keeping business and personal funds separate ensures that your operations are streamlined and preserves the integrity of your business structure. Take your business to the next level and connect with a business banker at Western State Bank today to open an account.
A clean, complete record of income and expenses will aid your monthly bookkeeping. It will also help you maximize your allowable deductions at the end of each tax year. Further, a dedicated account signals to prospective lenders that you mean business. Plus, for LLCs, corporations, and other legal business entities, it protects your personal assets from business creditors.
2. Using Personal Credit Cards for Business Expenses
A dedicated business credit card can help you build your business credit profile, protect your personal creditworthiness, and simplify bookkeeping.
Enjoy mobile payment options + free online expense reporting tools with a Western State Bank business credit card.
Business credit scores and reports are separate from your personal scores and reports. A designated card can help you establish business credit while minimizing personal risk. Like a designated bank account, it also takes the hassle out of bookkeeping and tax prep. And, with smart expense management, you can enjoy affordable short-term financing, plus valuable perks like rewards points for travel.
3. Failing to Automate
Today’s small business operators have their pick of powerful and user-friendly technological tools that save time, money, and liability exposure.
Explore built-in account tools and software that integrate with your bank data. From programmed invoicing to forecasting tools to vendor management, they can reduce overhead and errors. You can even access a whole dashboard of real-time KPIs (key performance indicators). Plus, as fraudsters increasingly target small enterprises, many of these tools provide an extra layer of protection against scams and theft.
4. Handling Payroll Manually
Whether you have two employees or 200, you can leverage automated payroll solutions to deliver cost savings and valuable data insights.
It used to be that payroll services were rarely cost-efficient for smaller businesses. Today, firms of all sizes can benefit from integrated HR and accounting tools. These integrations help to ensure swift, accurate payments and allow for in-depth reporting. They can also make it easier to remain in compliance with ever-changing tax and employment laws at the local, state, and federal levels.
5. Ignoring Hidden Charges
Business bank accounts can come with lots of money-saving features, but if you’re not attentive, you could be racking up lots of unnecessary fees.
Read your TISA (Truth in Savings Act) disclosure and consult your business banker
to understand all the perks and costs. Be sure to maintain minimum account balances to avoid monthly service surcharges. And consider opening a line of credit to avoid paying overdraft or returned check fees. With a few preventive measures, you can be confident that your cash position is solid and that your budgeting and forecasting are sound.