Integrating a bank account with Point of Sale (POS) technologies is an essential step in Party Rental Business.
It will help you streamline the sales processes and control your finances more effectively.
Think about situations that can happen during the holiday season.
As it is the busiest time of the year for party rentals, your rental office will experience a heavy workload, which may disrupt your business operations and make some customers leave your business in frustration.
That means you need a secure business bank account integrated with online payment solutions so the customers can rent things directly from their computers.
Fortunately, you do not have to look for that rental management software far away.
Reservety developed rental software for all types of rental businesses, so you can use it to improve cash flow and manage and monitor transactions more accurately.
We have already discussed how online sales can boost your sales. We firmly believe that you will hit hard bricks in your business endeavors without online payment solutions.
Ten Reasons to Open a Business Bank Account for your Party Rental Business:
1. Business Bank Account Protects your Personal Funds
If you face debt or a lawsuit, collectors may try to get the funds from your personal account. Even if you have earned those funds outside of your business, your personal account will be at risk.
When you separate your personal and business bank accounts, you will protect the funds that belong to you and your family.
2. Accept Online Payment through Credit Cards
If you are not a registered business and do not have a business bank account, you may not be able to accept credit card payments because of banking regulations.
That also means your customers may not reserve or book places and party equipment online as your business cannot accept payments from companies such as Visa and MasterCard.
3. Avoiding Tax Issues
Mixing up your personal funds with business finances is not the best idea, at least not in terms of taxes.
For example, IRS usually calculates business profits and expenditures differently. So, if you have your finances in that mix, it will give you a lot of headaches and may lead to discrepancies.
4. Permit Others to Access your Business Account
You cannot do that with your personal account. For instance, if you opened up a party rental business with two of your friends and hired an accountant, all of them can access the business account for business purposes.
5. Building Credit for your Business
In the modern age, having good credit is essential in taking business loans, applying for business credit cards or line-of-credit, or taking mortgages in your business name.
If you build good credit for your business, some party rental suppliers and vendors will sell their equipment and supplies in installments.
6. Present as a Professional Entity
Most suppliers and B2B companies would like to work in professional businesses. If you miss a business account, they may have some suspicions about your business model. Some even may not grant you line-of-credit or offer business discounts in the absence of a business account.
7. Limited Liability Companies (LLC) need a business bank account
The federal and state laws require legal entities to have a business bank account to avoid illegal transactions.
For example, it is not proper to put all the revenue into a personal banks account.
However, it is legal to pay for yourself by writing a check or setting up a direct deposit to your bank account.
8. Business Account Features Merchant Payment Solutions
Have you ever tried to register with online payment solutions? If you did, you might have noticed that the majority of those companies require you to either register as an individual or company.
When you register as a company, they offer better rates—for example, lower transaction or transfer charges.
Some banks put withdrawal or payment limits on certain bank accounts, while business accounts mostly do not have those limitations.
9. Keep your Identity Private
Some of us are very sensitive about revealing our identities. In other words, we do not want to be recognized as individuals but as a business. By opening a business bank account for your party rental business, you will accept or send payments in the name of your business.
10. Easy to Sell Business with a business bank account
Anything can happen in the business world. Let’s say you build a successful party rental business and a big corporation is interested in acquiring it.
In that case, you may show the performance of your business by presenting the financial data from your business bank account.
Concisely, it will be the best way to prove that your business is financially stable.
Also, you can sell your business along with its business bank account to make things easier for new owners.
What do you Need to Open a Business Bank Account?
1. Employer Identification Number (EIN) or Social Security Number (SSN)
If you create your party rental business as a Sole Proprietor, you can open a business account with an SSN.
However, if you formed your company as LLC, you need to provide your EIN.
Getting an EIN is not a complicated process.
You can obtain it from the IRS site if you have a social security number and a business that operates in the U.S. territories.
2. Personal IDs
All banks take identity confirmation seriously. You need to prove your identity by providing your state-issued IDs, such as a driver’s license or passport.
3. Business License
Most banks will require a business license before opening a business account for your party rental business because they need proof that you are legally engaged in business.
We have already mentioned how to obtain business licenses and permits in part 3.
4. Ownership Agreement
You may start your party rental business in partnership with others. If that is the case, you need to provide your operating agreement to indicate each partner’s rights and responsibilities and outline how the business will operate the financial affairs.
Business Account Application
Application forms may differ from place to place as each state has its own set of rules and regulations.
No matter what additional paperwork is required, you have to provide their recent copies. For example, outdated documents will not be accepted.
Things you need to consider before opening a bank account for your party rental business
1. Suitable Banking
When it is time to select a bank to open a business account, most people head to their local banks, which they know better. It is perfectly fine because a local bank, or the bank you have been working with for a long time, may genuinely address your needs. And more importantly, they will be transparent with you. In other words, they will reveal nuances or hidden fees that you may haven’t noticed otherwise.
Generally speaking, there may be trust between you and your local bank, and you will feel comfortable dealing with them in terms of banking.
However, too much reliance on your local bank may keep you from better opportunities. We are trying to say that you should shop around to find a bank that offers better conditions such as lower fees, higher limits, fast and convenient payment gateways, etc.
2. Banking Fees
Some banks charge the following fees: monthly service fees, per-transactions fees, ATM fees, wire transfer fees, and cash deposit fees. However, the list can include other expenses as well.
Therefore, you have to learn the fees and compare them with other banks’ fees so you can get the best banking deal.
3. Line of Credit
If you think your capital is not enough to accomplish everything indicated in Business Plan, then you may need to get a business loan from a bank.
We believe it is better to open a business bank account with the bank that offers loans for your business. That way, you will eliminate the hassle of managing your finances in several banks.
4. Interest Rate
If you are successful, your party rental business will accumulate a large sum of money in its bank account.
Why not use that to make a profit from interest rates? Some banks offer interest payments for the money kept in the savings and checking accounts, and we recommend targeting banks that offer higher interest rates.
5. Availability of Branches
You have to ensure the bank has nearby branches to not travel to the other city to deposit your money.
Reservety’s Party Rental Software will deploy payment solutions so you can accept online payments from Visa, MasterCard, PayPal, Stripe, Square, and others.
Although our software will decrease the number of trips to the bank, you may still need to deposit cash coming from on-foot customers.
6. Application Process
Most banks make the application process easy and convenient. For example, you can apply online by filling out the electronic forms and uploading digital copies of required documents. Or, you can visit the bank in person if you have concerns or questions about the application process.
We recommend you start the application process in the following order: First, find a suitable bank based on the information we have already provided. Second, clarify your concerns by talking with bank representatives. Third, gather the required paperwork. Lastly, submit your application for confirmation.
The process should not take too long as long as you have all the required documents.
Integrate your business bank account with online payment solutions
To accomplish this objective, we recommend Reservety’s Party Rental Software. It seamlessly integrates payment solutions such as Visa, MasterCard, PayPal, Square, Stripe, and Authorize.net with your business bank account. That way, your customers can pay for party rental equipment right at the comfort of their homes and request deliveries.
Concisely, an integrated business bank account will save time and costs, attract more customers by offering secure and convenient payments, and improve cash flow by automating recurring payments.