Bridgett’s Business Tips

HEAD: Business Accounts 101: What You Need to Get Started

Bridgett Kidd is an experienced financial professional who serves as Member One’s Vice President of Business Services and Lending. Her financial education series offers tips for making smart decisions when it comes to managing your small business.

Your business is taking off and you need to streamline your finances. Enter a small business account. Whether you’re looking to better manage your cash flow, obtain a loan to expand, or invest your earnings, there are certain financial documents you’ll need and steps you should take to begin, and I’m here to help explain what those are.

Q: Why should I separate my personal finances from my business finances?

BK: One benefit of keeping your personal and business finances separate is to ensure your business operates smoothly. You can achieve this by having separate checking accounts, one for personal and one for business. Making sure you deduct from the correct checking account for certain purchases not only streamlines your cash flow and is easier to track, but it gives you a reliable record when tax time rolls around. Having a separate business checking account also allows you to further establish your business so it can grow. If you’d like to obtain a business loan, most financial institutions will need proof that your business is financially stable and an
established checking account is a good start.

Q: What should I look for in a financial institution to help manage my small business?

BK: Deciding who to count on to manage your business’s finances is a big decision. Ultimately, you’ll want to work with someone you’re comfortable with and can rely on to answer questions and suggest products that will help your business thrive. Working with a local financial institution that knows your market is always a good option. As your business grows and becomes more established, you’ll want someone to turn to for guidance on your finances. Nothing beats the personal, face-to-face interaction of a local bank or credit union. Plus, investing in your local financial institution is an investment in your community— the very market you might rely on to support your own endeavors.

Q: What financial documents do I need to get started with a business account?

BK: Different accounts require different types of paperwork. In
general, you may need a copy of your business license, an employer identification number (EIN) issue letter from the Internal Revenue Service (if applicable), an operating agreement, or bylaws for your business. Additional items could include the certified articles of incorporation, a certificate of good standing, a certificate of assumed or fictitious name filing, and a signed and notarized partnership agreement. If all of these pieces sound overwhelming and confusing, talk to your local financial institution’s business services team for guidance. They can help explain what these documents are and how to obtain them.

Q: If I don’t have these documents established yet, can I still meet with someone at a financial institution to discuss my options?

BK: Certainly! It’s smart to start building this important relationship now. The business experts at your local financial institution are there to help guide you in how to handle your money. Meeting with them to explain your business’s current financial situation could help develop a
Bridgett’s Business Tips Business Accounts 101: What You Need to Get Started don’t suffer. Just as you would with a household budget, look for ways to cut back on expenses if staying within a budget is challenging. Having a solid grasp on your business’s financial situation proves to potential customers, investors, and lenders that they should work with you. After all, that’s one goal of most business owners: ensuring that they’re running their company, and their company isn’t running them.

Q: What additional tips do you have for small business owners who are looking to get more established?

BK: Set a budget to avoid having to draw money from your personal finances to keep your business going. While many business owners might find themselves in this unavoidable situation, try to operate your business within its means so your personal finances

Watch out for Bridgett Kidd’s column in the next edition of ColorsVA for more useful financial tips for small businesses.
Bridgett Kidd roadmap of next steps. Perhaps your business is more established than you realize and a business checking account is exactly what you need. Or maybe a loan to purchase equipment could help take your business to the next level.