Most Common Banking Mistakes Entrepreneurs?

banking-mistakes-580x387Banking mistakes can cost your business more than just money. They can cost time, cause stress, and make it harder to take advantage of opportunities. Here’s a quick look at some of the most common banking mistakes made by entrepreneurs.

Combining Personal and Business Accounts

Many entrepreneurs don’t keep their personal and business accounts separate. This may cause all kinds of issues as you try to deal with accounting and even your personal budget. These accounts need to be separate.

Choosing the Wrong Banking Partner

As an entrepreneur, you cannot just choose any bank for your business accounts. Some banks don’t have a strong focus on small businesses, while others do. Make sure you find a bank to fit your business needs specifically.

Using Debit Cards Instead of Credit Cards

Debit cards don’t provide the best protections for your business compared to a credit card. You don’t get as much protection against fraudulent activity and the “unlimited access” of a debit card can also be a problem.

If the card is stolen, you may wake up to find your entire business account has been drained. This may lead to bounced checks, issues with vendors and even bankruptcy. Credit cards are far easier to track and provide protection you don’t get with a debit card.

Neglecting Bank Reconciliations at the End of the Month

Your business needs to review bank statements every month and do a full reconciliation. This will help catch any mistakes you or someone else has made. Even little mistakes can add up.

A few other common financial mistakes to be aware of include:

  • Not preparing for business loans or cash advances properly
  • Poor understanding of the cash forecast of the business
  • Postdating checks

All of these mistakes are often made by entrepreneurs, especially when they are new to business. Avoiding these mistakes will help you keep your small business in good financial shape.

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