Choosing a banking product may not be the most exciting part of launching an online business, but it’s an important decision that will impact growth.
Despite the importance of understanding How to manage your business financesMany business owners overlook these products or judge them on the same basis as personal financial products.
Taking the time to consider your business banking needs at the start can save you a ton of paperwork, unnecessary fees, and stress when switching banks later.
Below we discuss the key business bank accounts and products to consider after you incorporate your company.
6 types of business banking products
- Business Bank Account
- Credit and debit cards
- Online Business Banking
- Credit facility
- Payroll Services
- Cash Management Service
Corporate banking products are designed to help businesses maintain stable cash flow, organize their finances, and foster growth. These products are similar to consumer products, but they have different eligibility criteria, interest rates, and other terms.
1. Business Bank Account
Having a business bank account is crucial to managing your personal finances. Apart from business transactionsIt’s an essential habit for financial transparency, and while it may sound simple, many merchants fail to do so. Choosing a Business Bank Account When starting a venture company.
Maintaining separate bank accounts for business and personal transactions may also be required by law. Business StructureIt’s easier to write Financial Statements You can avoid paying taxes.
Most online merchants open accounts with retail banks, which are different from investment banks, which are typically larger and cater to institutional investors and capital markets companies.
What to look for in a business bank account
- Fee structure: Aim for an account with the following features: Shopify BalanceThere are no fees to keep overhead to a minimum.
- Banking Services: Look for value-added services like integrations with accounting software, great customer support, and easy data export options.
- Account Accessibility: Make sure your bank offers convenient online and mobile banking services. Accessibility makes a big difference in efficiently handling your daily financial affairs.
Common Business Bank Account Fees
- ATM fees: Banks charge these fees for cash withdrawals at ATMs, and they can range from less than $1 to around $3.
- Cash Deposit Fee: This fee is usually a percentage of the amount you deposit over the monthly limit. Fees can range from 1% to 5%.
- Monthly service fee: This is the amount your bank charges you each month to maintain an active account.
- Transaction fees: A transaction fee is a fee charged by the bank for each transaction above an agreed upon number (usually around 100 per month).
- Wire Transfer Fee: If you plan to allow your customers to pay you via wire transfer, your bank may charge you a wire transfer fee for these transactions, which is usually calculated as a percentage of the total amount transferred.
2. Credit and debit cards
select business credit card This is an important consideration when opening a business bank account, as the two products are closely related. Accounts come with a variety of card types, each with customized bonuses, loyalty programs, fees and other terms.
Look for cards that: Shopify Credits This card offers volume rewards and no annual fee.
What to look for when choosing business credit and debit cards
- Cost-effectiveness: Prefer cards with low transaction fees and no minimum balance requirements.
- Security Features: Make sure your card incorporates the latest security measures, such as EMV chip and PIN authentication, to protect your financial transactions.
- Overdraft options: Understand the terms of your overdraft protection and any associated fees.
- Tap to pay: Contactless payments It can make your life easier.
- Credit Requirements: Please consider Line of credit or credit card Perfect for your business needs.
3. Online Business Banking
Online banking capabilities are essential for efficiently managing your business’ finances. Regardless of the type of account you open, online banking can help you respond quickly to changes in your business environment.
What to Look for in Online Business Banking
- Real-time updates: Choose a platform that promptly updates your account balances and transactions to maintain accurate financial records.
- Comprehensive service: Look for features like online check deposit, advanced payment solutions, and a user-friendly interface that will enhance your banking experience.
- safety: Strong security protocols such as two-factor authentication and secure encryption are essential to protecting your financial data online.
- Digital First: Consider whether your bank is “online first” – do you prefer to do all your banking online or would you like the option to visit a branch?
4. Credit facilities
The credit limit is Small Business Loans We provide flexible financing solutions for cash flow, capital expenditures, and other essential financing needed to continue operating and growing your business.
What to look for in a business line of credit
- Flexibility: Choose a line of credit that offers flexible withdrawal options and repayment terms. Revolving Credit Facility.
- Interest level: Compare interest rates and look for competitive options that won’t put a strain on your finances.
- terms of use: Understand the terms for drawing down your line of credit and the fees associated with it.
5. Payroll services
Efficient payroll services are essential for paying employees accurately and on time while handling records and complying with tax laws.
What to look for in a payroll service
- Automatic processing: Automation can help minimize errors and reduce the administrative burden. The service should handle everything from payroll calculations to salary distribution.
- Corporate Compliance: Your payroll product should ensure that your business complies with current tax laws. Payroll deductions and end of year forms.
- Detailed analysis: Accessing payroll reports allows you to effectively monitor your labor costs and budgets.
- support: Customer support and helpful learning resources, including guides Payrollhelps you solve the complex problems associated with payroll administration.
6. Cash Management Services
Effective cash management is crucial to the financial health of any business. Cash flow We meet our clients’ obligations and support their strategic decision-making.
Points to note about cash management services
- Cash flow forecast: Find products that can help you forecast future cash inflows and outflows and increase your ability to prepare for potential shortfalls. Cash Flow Management It helps to save your business from liquidity problems.
- Real-time analytics: Insights into your financial situation help you make faster, more informed decisions. Services that provide in-depth analysis can better support you. Business Finance ManagementMake sure every dollar is recorded.
- Integration features: Look for a cash management service that can integrate with your existing accounting and ERP systems.
The best online business banking isn’t offered by your bank
If you run an online business, traditional banks may not be able to meet your needs. Shopify Financial Products We provide customized, flexible solutions to help you grow your business without being tied down by traditional contracts and pricing structures.
*Shopify Capital loans must be repaid in full within 18 months, with two minimum payments within the first two six-month periods.
Business Bank Account FAQs
How do I raise capital for my e-commerce business?
Funding your online store is easy Shopify Capitalmeans you can customize your finances to match your sales and repay based on how your store is performing.
Does Shopify require a business bank account?
While you don’t need a business bank account to use Shopify, it’s usually a good idea to open one when starting an online business.
Which business bank account is best for e-commerce businesses?
Choose a bank account that suits the dynamic nature of your e-commerce business. Prioritize features like no minimum balance, no monthly fees, and a strong digital banking platform.
