When I incorporated my business a year ago it no longer made sense to use my personal bank accounts as the business’ bank accounts.  That’s a bad idea because it make the corporation look like a proprietorship, in which case you might lose the benefits of incorporation such as liability protection and better tax rates.

So, I had to decide which bank account to go with.  At the time, my business wasn’t doing a LOT of business, it had very few transactions per month, and purchases were fairly rare.

I ended up going with the Coast Capital Savings Deposit-For-Free Business Chequing account with per-transaction fees but no monthly or annual fee, and I’m typically paying only a few dollars per month.  Other bank accounts had a minimum monthly fee of $20 or more that I simply didn’t think was worthwhile.  Coast Capital Savings has great service and their online banking is also great.  Since most of my transactions are purchases on a credit card, paying per-transaction is not a problem.

I managed to get a no-fee VISA for the business - well, two of them actually.  Initially I got an American Express AirMiles Card, which has no fees and Air Miles, but I quickly discovered that many of the places I regularly go to online and out in the real world (typically restaurants) didn’t take American Express.  So, I hunted around for a good VISA/Mastercard I could use.

So, I switched to a CIBC BizLine VISA.  Somehow this product isn’t really a credit card product, but instead a business line of credit.  I’m not sure if that’s better or worse - so far, I’m enjoying a lower interest rate, free cheque writing (although they incur interest daily like a line of credit), no fees, and the CIBC VISA “CreditSmart Spend Report” which gives an automatic breakdown of your expenses each month.

If my business were small and simple enough, and I wasn’t concerned about balancing to the penny, I could probably use their “CreditSmart Spend Report” to do my expense totals each month, plus or minus a few manual corrections, which might save time for some businesses.  In my case I insist entering every expense transaction-by-transaction, which helps me test out Clarity Accounting and also to avoid errors since I can reconcile my credit card statements to the penny.

For more reading on the topic, you can read this recent Wall Street Journal article on this topic: Pick the Right Credit Card for Your Business

What credit card and bank accounts are you using?  What features do you look for?

Carry on the conversation by leaving a comment below.

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This entry was posted on Monday, June 9th, 2008 at 12:33 am by Dobes and is filed under Small Business Tips. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.