What Bank Accounts Does Your New Staffing Agency Need?
By Trevor Sheffield
January 11, 2023
Money Management is critical for any business. As a business owner, you already have a business banking account. If you don’t have a business banking account, then you might need to read our guide to how to start a staffing agency.
For those of you that already have started your business, you probably need more bank accounts than you realize.
In this article, we’re discussing the kinds of bank accounts staffing agencies need to open and how to use them.
Operating Account (OPEX)
Opening an operating account should be your first item of business. This account will be one that you use for spending money and receiving money—it’s called an operating account because it handles all of the funding needed to operate your business for the next short period of time. We recommend you use a business checking account as your operating account because it allows you to be the most versatile with your money.
You can withdraw and deposit funds in a variety of ways, which is one of the biggest benefits of using a business checking account for your OPEX. Additionally, since this will be the account employee paychecks come out of, you can research to see if your time tracking or accounting software works with the bank you’re researching to make payments even easier.
Tax Savings Account
Opening a business savings account is important, and we’ll talk more about that below—but consider opening two of these accounts and using one of them as a tax savings account. Each year, you’ll be required to pay taxes on your staffing agency’s income. When the time to pay taxes arrives, you’ll want to have the money set aside and ready to go. This is why you should use one of your savings accounts to set aside the appropriate portion of your agency’s income as soon as it is deposited. Knowing exactly where this money is intended to go will prevent you from spending it on anything else, so when tax time comes around you’ll be prepared. Additionally, business savings accounts often present the opportunity to earn a small amount of interest on deposited money. Earning more income on money that will eventually be paid to the government is just a bonus to this strategy.
Business Savings Account
What should you do with money you don’t plan to use in the immediate future? The simple answer: put it in a business savings account. This account will serve as a great place for you to place profits that you want to store away for later use or build into funding for future endeavors. Additionally, most business savings accounts allow you to earn interest on the money you keep there.
However, there are some drawbacks to earning interest on your savings. The first is that you will only be able to withdraw from this account six times per month due to federal regulations. Some banks also limit how often you can deposit money to your business savings account. Be aware of these restrictions when you’re choosing the right bank to work with and opening your accounts.
Consider your own plans for a staffing agency. Each of these accounts will benefit your business model and allow you to remain stable when you’re starting up. As your business thrives, more accounts may become necessary, but these are the three you should have open at all times. Assess how they can aid you in the process of building your new business and gaining traction with both clients and your employees.
There are other types of accounts that you should consider depending on various economic situations. For example, at the time of this writing, the US Federal Reserve is raising interest rates. Therefore, it might be a more opportune time to open a business certificate of deposit (CD) account. Similarly, you might want to consider a business money market account. Of course, having extra money to invest or place aside for a prolonged period of time is a luxury that most small businesses don’t have during their startup phase. Nevertheless, it’s good to know about them and think of how to utilize them in the future.