Are you a new small business owner? You probably have a lot of things on your plate Sorting out your financial issues is probably not the most exciting thing on your plate. However, you’re likely to have to deal with two things as soon as possible:
- Merchant account – If you plan on accepting credit or debit cards.
- Business bank account – Start a business banking account, which will make your accounting procedure a lot easier.
What’s a business bank account?
A business bank account is used to deal with business-related costs, such as rent and utilities. Business owners need to open a business checking account that’s different from any personal accounts because it prevents you from mixing your own personal funds with your business expenses. The last thing you need is the IRS on your back, and keeping things separate will decrease the likelihood.
If you use a business checking account as a substitute for a personal account, it is possible to allow workers to carry out tasks, like mailing checks and making deposits. Business accounts generally have better rules and lenient fees for business owners (as opposed to private accounts), although banks can change them at any time. While many banks will require a monthly minimum balance, others will permit you to just maintain a certain number of deposits or transactions each month. You may have the ability to keep your account by enrolling in online banking. By opening a business bank account, you are creating a positive step towards expansion: you will have the ability to accept credit and debit card payments, so long as you have a merchant account to process the transactions.
What is a merchant account?
When you open a merchant account, you’re developing a relationship with a credit card processor. You require a merchant account to process credit card transactions. The credit card processor credits the money from the issuing bank to your business bank account. The credit card processor will offer everything you want to take cards; a few will provide you a POS terminal at no cost, some will allow you to lease it, but others enable you to purchase it from them.
Applying for a merchant account is somewhat different from applying for a business bank account. Processors want to be certain you will be a trusted client, not cause excessive losses. They’ll examine a number of things about you and your business. Do you have a poor credit score? Is your business in a generally unreliable sector, like gambling or travel? If so, then you might have difficulty finding someone who will give you a merchant account. If you have ever lost credit card processing solutions because of breach of contract or fraud, then you will definitely be regarded as a high-risk merchant.