Opening Your Business Bank Account

Contractor's license? Check.

Incorporated business? Check (Hopefully).

Next thing to check off your list is having a dedicated bank account for your business.

If there is one group you never want to tango with, it's the IRS. Taking the step now to clearly define your business finances from your personal, the easier time you'll have should they ever come knocking on your door with an audit.

Trying to weed through years' worth of transactions in your personal account to try to figure out what expenses are for you and what expenses were for your business is going to be a bigger headache than trying to find reliable subcontractors that can pass a drug test.

A business bank account will be the one-stop spot to see very clearly what money is coming in and what money is going out. Whether it's you or you hire someone to do your taxes for you, when tax time comes, preparing your financial statements and filing your taxes accurately is going to be so much easier.

Additionally, you will have access to additional services for your bank like business loans should you need one, lines of credit, payroll services, and merchant services like being able to accept credit cards for payment.

With all that said, let me run you through how I did it for my business.

So I already banked with Chase and when I was incorporating the business and they offered the $300 promo for opening up a business bank account, it was a no brainer to make them my first stop.

Chase allows you the option to open an account online. Disclaimer: I tried the online option and kept getting an error that told me to go into my local branch to finish setting up the account. More on that later.

If you do not have a promo code, you can use mine.

Starting from here, you will be presented with the first page of the application:

For me, I selected "Yes" because I have a personal account with them already, but selected whatever answer applies to your situation.

If "Yes", you will be asked to log in to your pre-existing account. If your answer was "No," then you will automatically be moved to the next page of the application. Select the correct business structure and type for your business.

Depending on what you choose, you will be presented with additional questions about the business. For example, if you checked sole proprietorship, you will be prompted to answer if you are the owner of the business and if the business is owned by a trust. Likewise, if you chose Limited Liability Company as your business structured, you will be asked questions like if your company is publicly traded (probably not) and if your company is a non-profit (again, probably not).

After you have answered the additional questions about the business structure and type, you will be notified on the next screen the following:

When I was doing this application, I never had to upload any of these documents to Chase. However, when I went into my local branch to finish the application, I did need to present the banker with:

• My Name

• Physical Address

• Date of Birth

• Social Security Number

• EIN

• Certification of Formation

The last two are because my company is an LLC. If you are a social proprietor, you will not be asked for either an EIN or Articles of Organization/Certificate of Formation.

Next, you will start filling out personal information for the application.

Fill out your address and contact info:

Check these two boxes and click "Next."

Now you will be asked to fill out information about your business. Based on the business type and structure you chose previous, parts of this page may look a little different. For this example, I am using LLC because that's what my business is.

For the business classification above, more than likely, you can likely type in "construction" into the search box to find your business classification and be presented with the following:

The "236110-null" option is the default choice for construction companies. However, if you want to be more specific, you can choose "Other-Choose my own" and then the four additional dropdown boxes will appear. Choose "Construction" in the business category drop down and then you can get more specific with the business type and business sub-type drop downs.

It was at this point that I received an error that preventing me from completing my application. I was directed to go to my local Chase branch to finish the application.

I scheduled an appointment with my local branch, met with my banker, and the appointment lasted about 30 minutes total. The questions from the online application are similar/identical to the ones my banker asked me in person.

By the time the meeting finished, I had an open business bank account that I could use. My debit card would be mailed to me, and the only pending question was how much credit I would have available to me on my credit card.

My banker would call me two days later to notify me of how much credit I was approved for, and I would receive my credit card in the mail roughly a week later.

Although I hit a snag with opening an account online, opening an account at the local branch could not have been easier.

So if you hit a snag with the online application, do not hesitate to go in to your local bank branch to get this done. One 30-minute meeting today can save you hours down the road should you ever have to get into the nitty-gritty with the IRS about the transactions of your business.