How to Set up a Business Bank Account for Your Freelance Business

There are numerous benefits to setting up a bank account for your business.  It makes you appear more professional to your clients which helps to get better clients with bigger jobs.  It also makes you appear more professional to investors and creditors who might be inclined to lend you money if you've established a credit history with a business bank account as opposed to with only your personal credit.  Additionally, having a business bank account streamlines your finances so that you can easily figure out what your freelance income and expenses are for the purposes of budgeting and taxes.

 

Of course, setting up a bank account for your business takes a little bit of time and may also require you to put out some money for minimum dollar amounts and small fees.  But this is time and money well spent.  Do your research into finding which bank account is right for your freelance business and then set it up.  Once it's done, you'll be glad that you got it taken care of.

 

The first thing that you'll need to do is to figure out which bank you want to use for setting up your business bank account.  If there's a bank that you already use for your personal accounts, you should look into what options they have for your business account since you're already going to them (online or in person) on a regular basis anyway.  If you do not want to bank with the same bank for one reason or another, you can look online at the other options in your area.  You should choose a bank with a local branch in case you ever need to work out bank problems in person.

 

Once you've selected the bank that you'd like to use for setting up your business bank account, you should review the different plans that they offer.  There are several different things that you'll want to take a look at.  Check if you're required to keep a minimum balance in the account and whether that balance is reasonable for what your business is earning.  See what fees are associated with the account and whether those fees are waived after a certain balance is obtained or after certain services are purchased.  Check what services are available for your account; these may include online billing and statements, debit and credit cards, money management tools and more.  Consider what you realistically need from your business bank account.

You might work back and forth between selecting a bank and selecting a business bank account plan.  For example, you may have originally decided to go with your normal bank but then find that you don't like the plans that they offer.  You may then research plans and find one with terms that you like.  You can go back to your original bank and see if they have a plan with similar terms.  If not, you can choose the new bank.  In other words, this setting up a bank account for your business is a research-based project rather than one which happens step-by-step.

When you have selected the bank and plan that you like, you should go into your bank to set up your account.  Alternatively, you can often set up the new account online but physically going to your bank will let you meet your account manager, go over any questions that you have and get your terms and information in writing in hand.  It takes a little bit of time and energy to set up your business bank account, but you'll start reaping the rewards almost immediately.  Your business expenses will be clear and easy to understand which will help with billing, invoicing, payments to any subcontractors and dealing with taxes.  And as you begin to accept payments through your business bank account, you'll gain credibility in your work which will impress clients and investors.  The balance in that account should just keep on going up from there!

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