Maximizing Your Small Business:The Importance of Accounting and Bank Services

What Is Small Business Accounting?

For small businesses, accounting involves keeping track of all financial transactions by recording and summarizing the data into meaningful financial statements. This allows the business owner to gain insights and make informed decisions for the growth and success of their business.

Some common accounting tasks for small business owners include:

• Day-to-day bookkeeping
• Creating invoices
• Monitoring cash flow to cover all upcoming expenses.
• Keeping an eye on payables and receivables. It’s important to know whether your customers are paying you on time.
• Preparing financial statements and reports

• Filing for tax returns

What services for small businesses should your bank offer?

Fast (and cheap) to open a new account

Running a business demands your full attention and leaving no room for lengthy application procedures and slow processing times. Fortunately, many banks today offer quick approval processes that enable you to establish your account online in just a matter of minutes. This saves you valuable time and energy. Furthermore, if the bank requires little to no initial deposit to open an account, it's an added advantage.

Convenient Automated Clearing House access

ACH is a form of electronic money transfer that eliminates the need for paper checks, wire transfers, or cash. It can be utilized for both outgoing payments (payables) and incoming payments (receivables). Many businesses utilize ACH for their payroll, loan payments, and business-to-business transactions, as well as for accepting customer payments, especially for large invoices and recurring charges.

The cost of using ACH may vary depending on the financial institution. Some banks charge a flat fee or a small percentage per transaction, while others impose a monthly fee for a specified number of transfers. To determine the cost of this service, it is recommended to inquire with the bank before signing up.

Accounting software integration

Linking your business bank account with your accounting software can greatly enhance the process of managing your finances. This integration enables you to continuously track your financial status and monitor your cash flow on a daily basis. Additionally, it reduces the risk of accounting errors by automatically recording all financial transactions in and out of your accounts.

Payroll services

As small businesses hire more employees, a bank-offered payroll service may simplify bookkeeping for busy small business owners. “If you don’t quite have the budget for an independent bookkeeper, many financial institutions offer access to payroll software or services to help you get things done.

Online banking

Having the capability to transfer funds, pay bills, and deposit checks from your computer or mobile device can provide convenience and flexibility.

By opting for an online-only bank, you may have the opportunity to save on banking services as they often have lower fees due to the absence of physical branches.

Is it possible to utilize a personal checking account for my small business?

The answer to this question varies based on the bank's policies. Some banks might permit you to use your personal checking account for business purposes, while others may not allow it. Regardless of whether you're permitted to use your personal checking account for your small business, it may be beneficial to reconsider this decision. It's crucial to maintain a clear separation between your business and personal finances in order to keep your records organized for tax purposes.