Banking & Financial Systems

1. 1

   Open the business accounts

   Open a business checking account in the exact legal name of your business. Most banks ask for your formation papers from the state, your EIN from the IRS and a photo ID for each owner who signs on the account.

   Keep business and personal money completely apart from day one. Mixing them makes bookkeeping harder and can weaken the liability protection of an LLC or corporation. Compare a local bank or credit union with online banks, looking at fees, deposit limits, mobile deposit and how well the account connects to your accounting software.

   • Get your EIN and formation papers ready
   • Open checking in the exact legal name
   • Compare fees and software connections
   • Move all business money out of personal accounts
2. 2

   Separate money by purpose

   Use more than one account so money has a clear job. A common setup is a main operating account for daily bills, a tax account where you set aside a share of each payment and a savings account for your cash reserve.

   When money arrives, move set amounts into the tax and savings accounts right away, on a fixed day each week or month. This keeps you from spending tax money by accident. Your accountant can suggest how much to set aside for taxes based on your income and your state.

   • Open an operating account for daily bills
   • Open a separate account for tax money
   • Open a savings account for reserves
   • Move set amounts on a fixed schedule
3. 3

   Cards and account access

   Decide who can see, spend and move business money, and give each person only the access they need. Owners usually keep full access. A bookkeeper may only need view access, and a crew lead may only need a card with a low limit.

   Issue separate cards to each person so every charge can be traced. Set spending limits and turn on alerts for large charges. Use strong passwords and two-factor sign-in on every bank account. When someone leaves, cancel their card and remove their access the same day.

   • List who needs view, spend or transfer access
   • Issue a separate card to each person
   • Set limits and turn on spending alerts
   • Remove access the day someone leaves
4. 4

   Taking payments

   Choose the payment methods your customers expect and that you can track easily. Most small businesses take credit and debit cards, bank transfers and checks. Card processors such as Square or Stripe, or the payments built into QuickBooks or Xero, can handle this.

   Compare processing fees, how fast money reaches your bank and whether the tool connects to your books. Let customers pay online from an invoice or your website, which often speeds up payment. Never write down full card numbers, and let the processor store card details so you do not have to.

   • Pick the payment methods you will accept
   • Compare processor fees and payout speed
   • Turn on online pay links for invoices
   • Let the processor store card details
5. 5

   Card fees and bank debits

   If you want to pass card fees on to customers, check your state law first, since some states ban or limit surcharges. Card networks set rules too. Visa, for example, requires notice to your processor 30 days ahead, signs at the point of entry and at checkout, the fee shown on the receipt, a fee no higher than your card cost and no surcharge on debit or prepaid cards.

   For repeat bank payments, such as a service plan paid each month by ACH, get the customer's written OK first. Nacha rules require the authorization to state the amount, timing and how to cancel, and you must give the customer a copy. Keep it on file.

   • Check your state's surcharge law first
   • Tell your processor before adding a card fee
   • Never add a surcharge to debit cards
   • Get a signed OK for repeat bank debits
6. 6

   Deposits and job payments

   Set clear rules for when you take a deposit and how the rest gets paid. Larger jobs often use a deposit before work starts, then progress payments at set points and a final payment when the job is done.

   Put the deposit amount, payment schedule and due dates in your written estimate or contract. Some states limit how much a contractor can collect up front or require special handling of deposits, so check your state rules and ask your attorney. Record every deposit in your books so you know which money is already earned.

   • Decide which jobs need a deposit
   • Set payment points for larger jobs
   • Put terms in every estimate and contract
   • Check your state's rules on deposits
7. 7

   Invoices, refunds and disputes

   Send clear invoices fast and have a written policy for refunds and card disputes. Each invoice should list the work, the amount, the due date and how to pay. Send it the day the work is done, using your accounting software if you can.

   Write a simple refund policy and share it before the sale. When a customer disputes a card charge, respond quickly with your signed estimate, photos, messages and proof the work was done. Keeping these records for every job makes disputes much easier to win and complaints easier to settle.

   • Send each invoice the day work is done
   • Write and share a refund policy
   • Save photos and signed paperwork for each job
   • Answer card disputes quickly with proof

General information only, not legal, tax or financial advice. See the Disclaimer.