By Dianne Bufford/ Liberty Bank of Arkansas

Developing a good relationship with a bank is important for the success of any small business. One basic step in starting that banking relationship is to open a small business checking account.  There are many benefits to having a small business account and features available that will both save time and money.   Here are a few to look for when shopping for a small business account:

1. Free business checking – Most free business checking accounts are designed to fit small businesses and some partnerships that don’t have a large number of monthly transactions.  Check to see how many transactions are allowed under the free account structure and what will be charged if you exceed that number. Usually, a charge per item will be assessed and that per item amount can vary from bank to bank.  Most of these accounts don’t require you maintain a minimum balance.

2. Free business checking with interest - This is another basic checking account option that would be a good fit for a sole proprietor or small business owner. Interest is paid monthly on daily collected balances over a certain amount. The interest rate could be on a tiered basis and increase as the account balance increases.  The free transactions allowed and per item charge thereafter probably will be the same as the basic free business checking.

Be aware that there could be fees associated with the account.  Transfer of money fees, check processing and check cashing fees are examples of fees that could be charged at some banks. The overdraft fee can vary from bank to bank but some banks provide overdraft protection options and linked account options that help prevent that fee.

3. Online banking and bill pay, electronic (e) statements – Online banking and bill pay offers convenient access to your account information 24-7.  Online banking and bill pay gives you the flexibility of viewing latest account activity, transfer funds between accounts, and pay bills whenever you want.  The account information can be downloaded into accounting software like Quicken or Microsoft Money for recordkeeping.  Income and expenses can be tracked, categorized and easily retrieved, especially beneficial come tax time.

With E-statements, there is no waiting on the mail to get the bank statement. The entire statement, complete with copies of checks, can be retrieved the same day the statement is generated at the bank right from your computer. The statement can be saved on your computer or printed. For those who are eco friendly, it saves paper.

Opening a small business account is a good first step in establishing a relationship with a bank. It will simplify your record keeping and your life. As your business grows and your needs change, your banker will be familiar with your financial business needs and be able to recommend services that will meet those needs. Some examples are merchant card processing, lock box services, payroll account, and remote data capture. Having a business account established and a relationship with a banker will also help when seeking financing for expansion.

Diane Bufford is the Marketing Director for Liberty Bank in Northwest Arkansas.