6 Business Banking Blunders

If you’re a busy small business owner, business banking solutions can help you gain operational efficiencies and enhance your enterprise’s financial position. 

But too many entrepreneurs overlook key tools and best practices, leaving cash on the table and, in some cases, putting their hard-earned resources and reputations at risk. 

Want to boost your business banking game? Avoid these six common pitfalls: 

1. Not Establishing a Designated Business Account

Keeping business and personal funds separate ensures that your operations are streamlined and preserves the integrity of your business structure. 

A clean, complete record of income and expenses will aid your monthly bookkeeping and tax prep. Further, a dedicated account signals to prospective lenders that you mean business. Plus, for LLCs, corporations, and other legal business entities, it protects your personal assets from business creditors. 

2. Using Personal Credit Cards for Business Expenses 

A dedicated business credit card can help you build your business credit profile, protect your personal creditworthiness, and simplify bookkeeping. 

A designated card can help your business while minimizing personal risk. Like a designated bank account, it also takes the hassle out of bookkeeping and tax prep. With smart expense management, you can enjoy affordable short-term financing, plus valuable perks like rewards points. 

3. Failing to Automate 

Today’s small business operators have their pick of powerful and user-friendly technological tools that save time, money, and liability exposure. 

Explore built-in treasury management services that integrate with your bank account. These solutions can reduce overhead and errors. Plus, as fraudsters increasingly target small enterprises, many of these tools can provide an extra layer of protection against scams and theft. 

4. Handling Payroll Manually 

Whether you have two employees or 2,000, you can leverage automated payroll solutions to deliver cost savings and valuable data insights. 

It used to be that payroll services were rarely cost-efficient for smaller businesses. But times have changed, and firms of all sizes can benefit from integrated HR and accounting tools. They can help to ensure swift and accurate payments. 

5. Not Reconciling Your Statements 

Your account statements are a convenient, consolidated source of information, but it’s vital to regularly validate them against your internal records. 

Maintaining consistent oversight can help you detect errors and fraudulent activity. It also confirms that your internal metrics represent your actual financial position. With a reliable foundation of data, you can optimize decision-making, including smarter working capital management and forecasting. 

6. Ignoring Hidden Charges 

Business bank accounts can come with lots of money-saving features, but if you’re not attentive, you could be incurring unnecessary fees. 

Read your TISA (Truth in Savings Act) disclosure and consult your business banker to understand all the perks and costs of your account. Be sure to maintain minimum account balances to avoid monthly service surcharges. Consider opening a line of credit to avoid paying overdraft or returned check fees. With a few preventive measures, you can be confident that your cash position is solid and that your budgeting and forecasting are sound. 

Guidance You Can Bank On 

For personalized advice on making the most of your business banking tools, work with one of our local Treasury Managers or business bankers.