6 Factors to Consider Before Choosing a Business Checking Account

presented by ConstantContact.com featured partner Novo.

As a small business owner, you’re no stranger to having a lot on your plate, from managing day-to-day operations to long-term planning and strategizing. That’s why the right business checking account can help save you time and money, enabling you to prioritize what’s most important: managing your business.

By separating your business and personal finances, a business checking account can provide multiple benefits, such as easier expense tracking, cash flow management, and tax prep. However, not all business checking accounts are created equal, and it’s important to do your research before signing up for one.

Whether you already have a business checking account or are looking for your first one, read on to learn which key factors to consider when choosing the right one for your business.

Why should you separate your business and personal finances?

There are several benefits to keeping your business and personal finances separate. A business checking account simplifies expense tracking, increases the likelihood of getting approved for business financing, and makes tax filing easier.

Separating your business and personal finances enables you to track which transactions are related to your business and which are personal. This can make it easier to stay on top of your expenses and ensure you’re not overspending compared to your budget. When tax season rolls around, you also will have a better understanding of your business income and expenses, so you can more easily calculate your tax payments and deductions.

Another benefit of separating your business and personal finances is that a loan or line of credit is generally easier to obtain. A separate business checking account helps legitimize your business in the eyes of potential lenders. Potential lenders also evaluate the health of your business using data such as business credit, revenue, and other cash flow data. Keeping your finances organized with a business checking account can make it more likely for you to be approved for a loan or line of credit when you need it.

Top factors to consider when choosing a business checking account

Location

Consider location when choosing the right business checking account. For example, suppose you operate your business in a small town. In that case, there may not be many local options available, so it may be wise to choose a business banking platform located in a larger city with more options available.

More and more businesses are also turning to online-only business checking. An online business banking platform is generally more accessible and convenient, allowing you to manage your account anywhere and any time of day rather than taking time out of your busy schedule to visit a bank branch during business hours. Online banking platforms also tend to offer a wide range of features and services tailored to the specific needs of businesses, from invoicing to easier integrations with your business tech stack.

Fees and Requirements

Not all business checking accounts are created equal when it comes to fees. Some charge a monthly fee, while others do not. Read the fine print and ensure you understand the fees associated with the account before signing up: many business checking accounts will require a minimum balance to avoid being charged a monthly fee. Some also charge ACH or wire transfer fees, while others do not.

While fees aren’t typically excessive upfront, they invariably add up over time. When choosing a business checking account that suits your needs and budget, keep any fees and requirements in mind.

Features to save you time and money

The right business checking account can significantly benefit your business long-term with features that save you both time and money, from online banking to automated processes.

Try to find a banking platform that offers automated processes, such as electronic bill pay, recurring and customizable invoicing, and automatic cash allocation. These will help you save time on administrative tasks and can help you keep better track of your spending and available funds.

A business checking account with these features can help you streamline your operations and make more informed financial decisions for your business, leading to improved efficiency long term.

Software integrations

While not all business checking accounts offer software integrations on their platform, some do, and they may be worth checking out. Some offer the ability to integrate your banking dashboard with other business tools to streamline essential cash workflows, from making and receiving payments to bookkeeping, accounting, and tax preparation. 

Integrations with your favorite business software can go a long way in helping you manage your business by centralizing your business finances to a single platform.

ATM Access and faster payments

Eliminating cash flow friction is key to keeping your business running smoothly. To help you make faster payments, find a business checking account that enables you to access cash quickly and easily, with both ATM and virtual card access.

A virtual card for your business allows you to make online purchases without using a personal credit card. This can help avoid any potential credit card fees, and it can also help protect your business’s credit score.

On the other hand, ready ATM access allows you to withdraw cash quickly and easily, whether you need to make a quick purchase or pay a bill. Find a business checking account that enables you to withdraw money from ATMs without fees. Novo, for example, refunds any ATM fees incurred at the end of each month back into your account, including international ATM fees.

Cash benefits and discounts

Some business checking accounts offer better perks than others. From cash back rewards for every purchase made with the account’s debit card to discounts on essential business tools, both can be helpful for businesses looking to save money.

The right business banking platform will benefit you long term

The right business checking account can make a big difference in your business’s long-term growth. Business banking platforms can vary significantly in what they offer. Whether you’re reevaluating your current choice or looking to open your first business checking account, it’s important to consider factors like location, fees and requirements, and any key features that can give your business an edge. These can help you make the most informed decision on the checking account that’s right for you and your business. 

About Novo

Novo Platform, Inc. (“Novo”) is a financial platform that helps small businesses unlock their potential. Novo provides access to an award-winning checking account, tools that speed up cash flow, and an all-in-one ecosystem for simple cash management. To learn more, visit www.novo.co.

Constant Contact customers receive up to $100 when opening an account. See more details here.

_Disclosure

_{Novo is a fintech, and not a bank. Novo acts as a service provider to Middlesex Federal Savings, F.A., and the deposit and banking products obtained through the Novo platform are provided by Middlesex Federal Savings, F.A.}

_{Middlesex Federal Savings, F.A. is a federal savings bank and an FDIC-insured depository institution (FDIC Certificate 28368). Deposits made at Middlesex Federal Savings, F.A. through the Novo platform receive FDIC insurance protection on a pass-through basis up to the applicable legal limit. When determining the amount of your deposits covered by FDIC insurance, please note all deposits you make through the Novo platform will be aggregated with all deposit accounts of the same ownership and/or vesting held at Middlesex Federal Savings, F.A. and Middlesex Federal Savings, F.A. brands. Additional information regarding FDIC insurance coverage is available at www.fdic.gov.}