A Guide To Business Banking

A Guide To Business Banking
Learn more about business banking and banking services available for small business owners, including business bank accounts, credit cards, payment processing, and more.
by Square Jan 25, 2022 — 5 min read
A Guide To Business Banking

When you think of business banking, big players like Wells Fargo, Citi, or Bank of America might come to mind. But what exactly do they do for your business? And which provider is right for you?

Here’s a guide to business banking to get you started.

What is business banking?

Business banking refers to the process of a third party managing a company’s finances. When you select a banking provider to store your business funds, you receive a business bank account, the option to apply for business loans, and other financial services that you may need.

What’s the value of business banking?

Business banks are designed to keep your funds safe and allow you to get a clear picture of your financial health. A business banking account offers perks that business owners don’t receive with a personal checking account. (It’s important to separate your business and personal finances for other reasons, too.)

A business banking account allows you to:


To open a business bank account and reap the business banking benefits, you need to provide documentation that proves the legitimacy of your business. You’ll need several business documents to apply for and open a business bank account. These documents may include an Employer Identification Number (EIN), business formation documents, and a business license.

How to open a business account

The account you open depends on the type of business you’re starting or running, and how you plan on using the account. Here are a few factors to consider when selecting a provider:

What is online banking?

Also known as internet or web banking, online banking is a form of banking in which transactions are conducted electronically over the internet. While customers accustomed to traditional banking may visit a bank branch to complete basic banking transactions, online banking customers would use a computer or mobile device to log in and transact online.

What is the difference between online banking and digital banking?

Online banking is typically associated with a digital front end experience while other activities associated with your account may require manual intervention. Digital banking, on the other hand, goes beyond digitizing basic banking features and services. Digital banking will combine online and mobile banking as well as other financial services associated with traditional banking.

What are business banking services?

There are several business banking services a bank may offer. Here are a few common services you might expect:

Mistakes business owners make when banking

Once you’ve chosen your business banking provider, you need to set up your account. For the most part the process is pretty straightforward, but you still need to be aware of some common mistakes.

Not creating separate business and personal banking accounts. It’s crucial to keep your business and personal finances separate, meaning a business bank account should be one of the first things you get when starting a business.

Incorrect account setup. The initial setup requires time and various documents. Be meticulous during this step of the process and work with your provider to better understand everything you need to get your account up and running.

Not maintaining the minimum monthly balance. Some business bank accounts require a minimum monthly balance. If you dip below this minimum, providers usually have associated fees.

Not using your bank balance to manage cash flow. To avoid overdraft fees or minimum monthly balance fees, you can send money to a bank account in seconds with instant bank transfers, or schedule recurring transfers with same day money transfers.

Square Checking: Manage your business funds

If you accept Square Payments and want instant access to your sales,you can manage your business funds using Square Banking. With Square Banking, your payments, business banking accounts, and cash flow sync together.

With Square Checking, the sales you make with Square hit your account immediately – no waiting. And your account comes with a Square Debit Card to help you purchase inventory, supplies, or anything else you need to run your business as soon as you make a sale. You can see a complete snapshot of your Square balance spending and activity within your Square Dashboard and in Square Point of Sale. Square Checking may be helpful for businesses that have:


With Checking, there’s no need to wait in line at a bank branch with paperwork in tow; simply order a Square Debit Card from your Square Point of Sale app.

**Questions about Square Checking? Here’s how it works.

Square, Inc. is a financial services company, not a bank. Banking services are provided by the Square banking affiliate, Square Financial Services, Inc. or Sutton Bank; Members FDIC.

The Bottom Line is brought to you by a global team of collaborators who believe that anyone should be able to participate and thrive in the economy.


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