5 Benefits of a Business Bank Account 

Opening up a business bank account can be a major milestone on your company's journey to success. It allows you to stay organized by keeping business transactions separate from personal, and makes it easier to track your company's income and expenses.

Running a business comes with responsibilities, and one of them is keeping its finances organized. If your business operates as a limited liability company (LLC), limited liability partnership or corporation, having a separate bank account can be wise for organizational purposes. Even if you're operating as a sole proprietorship, having a separate bank account for your business is a smart idea.

Keeping your personal and business finances separate not only ensures you can make your day-to-day financial management simpler. It provides records for tax preparation, helps track business performance and can help set your business up for long-term success.  

 

1. Business Bank Accounts Can Help Growth

A business bank account gives you a detailed overview of your business’s cash flow, helping you track where money is coming from and where it’s going. This makes it easier to manage funds, plan for future expenses and make decisions that support your long-term goals. 

Business bank accounts can also make it easy to access credit so you can scale your operations. Building a relationship with a trusted bank can open doors to lines of credit and loans that allow your business to invest in growth opportunities, expand operations or purchase new equipment.  

Another major benefit of a business bank account is the access it gives you to business tools that are designed to support your growth. For example, treasury management platforms can allow you to manage payments, accounts receivable, monitor accounts and handle transactions from anywhere.

 

2. Access to Banking Services

When you open a business bank account with your bank, you’ll likely get access to a range of banking services. These tools and features are specifically designed to help businesses stay on top of their finances. With services like real-time account updates, online statements and multi-user management, you’ll have the resources to manage your accounts with better control and flexibility. 

Business banking services might include:

• Real-time account balance and activity updates
• Online access to check and deposit images
• Digital statements to keep records organized
• Account-to-account transfers for easier money movement
• Business bill pay options
• Stop payments, including the ability to start or cancel them
• Alerts to keep you updated on account activity
• Access to a dedicated business banker

 

3. Automated Bookkeeping Software

Bookkeeping is a big part of running a business, but it can take up a lot of time. Automated tools make this process faster and more efficient. By connecting your business bank account to bookkeeping software, you can simplify tasks, reduce errors and focus on other priorities. 

For example, City National Bank offers AgilLink and Exactuals to help businesses manage their bookkeeping and administrative work efficiently.

Here’s how these tools help with bookkeeping:

• AgilLink provides cloud-based accounting that integrates investment data, automates bank reconciliation and creates consolidated financial reports. It also helps you manage 1099 contractors, monitor cash flow and handle complex accounting tasks.
• Exactuals is a cloud-based solution that speeds up manual work like royalty calculations, rights management and payment processing. It offers a payer portal for managing payments in real time or in batches, automated workflows to eliminate paper processes and tools to track payment status and reporting. Exactuals also supports international payments if you have a business with global operations. 

 

4. Simplified Tax Preparation 

A business bank account can help make filing taxes easier by keeping all your business transactions in one place. With a record of income and expenses, you can quickly gather the information needed for tax preparation without the hassle of sorting through mixed accounts or incomplete data.

Having accurate and organized financial records can also help you stay in compliance with IRS regulations for business taxes. When everything is properly documented, you’re less likely to overlook important details, deductions or payments. 

 

5. Liability and Identity Protection

By keeping personal and business assets separated, business owners can help make sure that their personal assets are not at risk if their business faces legal or financial issues.

For example, if your business is sued or incurs a large amount of debt, a separate business account can help prevent creditors from going after your personal savings or property. However, keep in mind that you may also need to set up your business as an LLC or use a similar designation in order to reap this benefit. Speak to your legal, tax and other advisors to help you decide what options are right for your specific situation.

Keeping your accounts separate can also allow employees to handle routine banking tasks and transactions without giving them access to your personal finances.

When it comes to fraud, a recent report showed that over 5 million people reported identity theft and fraud complaints in 2023. Using your business’s Employer Identification Number (EIN) instead of attaching your personal Social Security number to your company can help add an extra layer of protection against fraud. 

An EIN is specifically tied to your business, not your personal identity. When you use your Social Security number for business purposes, you increase the risk of it falling into the wrong hands. By using an EIN, your personal identity stays separate and is less vulnerable to cyberattacks, data breaches or unauthorized use. 

 

What is Needed to Open a Business Bank Account?

Opening a business savings account or checking account is generally a straightforward process, but you’ll likely need to gather a few documents.

The exact requirements may vary depending on the type of business you run, but here are the most commonly requested items:

• EIN or Social Security number if you’re a sole proprietor
• Business license to verify that your business is properly registered
• Articles of incorporation or organization for corporations or LLCs
• Partnership agreement if your business is a partnership
• Trade name registration or DBA (Doing Business As) paperwork if your business operates under a different name than its legal one
• Ownership agreements or other documents showing who has authority to manage the account

It’s always a good idea to check with your bank ahead of time to make sure you have everything you need before you attempt to open a new account.

 

Open a Business Bank Account Today

Your business needs the right tools to grow and succeed, and it all starts with a business bank account. Whether you’re looking for a business checking account to handle everyday transactions or a business savings account to plan for the future, City National Bank has you covered. Get started today.