How do I actually set this up?

Set up and transition over to your new account

With the help of an evaluation rubric, you narrowed your options down to the top bank you want to set up. Now, all that’s left to do is make it happen.‍

Because you rigorously evaluated your choices, you can come into the application process with a clear head on what to expect—and make the most of your account from the jump. Begin with the bare necessities, so you can eventually leverage your account to its full capacity.

Set up your freelance business bank account

At this point, you know which bank account is your winner. Congrats, that’s a big step in the right direction! However, we want to provide general guidance on launching your account so you can feel confident going into the process.‍

At the end of this exercise, expect to be fully enrolled in your bank account and integrated with any other tools in their stack. 

Follow the steps to set up your account and check them off in your workbook:

1. Follow the company’s instructions to sign up and enroll in the account. If it’s a local bank, you may have the option to do this part in person.

2. Make a test deposit. Make sure you have all the numbers right before integrating it all into your systems. Make a test deposit of a small amount (no more than $20).

3. Fulfill any minimum deposits, if needed. Cut a check or initiate a transfer to fund your account.

4. Set up any sub-accounts—like for savings or taxes—if the company offers it and you want to have them all in one place. (Pro tip: It’s okay to use different companies for your different banking products.)

5. Integrate with any tools, if necessary. Set up email alerts, integrate with Quickbooks or other accounting solutions, and/or launch any proprietary software associated with the bank.

6. Update autopay info as needed. You will need to do this if you use bank account info to transfer money or pay for things. If you get an associated business credit card from the bank, you can also update your credit card autopay info.

7. Update any software or tools that already track your business payments from an existing bank account.

8. Get a card to pay for business expenses. This is another crucial layer to keeping business and personal expenses separate. You will still want to track any biz expenses that you already paid for in your personal account. Once you have a separate bank account + credit card, keep all your business expenses there for easy tracking moving forward.

9. Set up your paycheck to yourself. You can do this by setting up a recurring transfer to yourself or doing it manually (if you’re the kind of person that can or wants to remember to do it every time). This is called an owner draw or personal draw.

How do you know how much to pay yourself? 

There are many ways you can do this. Here are three common methods:‍

💸 Automatically deposit a percentage of each payment you receive into your personal checking account. Then, direct it to the right place (retirement, emergency fund, short-term brokerage account, or other financial destination). You can consolidate payments and do this every 2 or 4 weeks.

💸 Deposit a percentage of your revenue every 2 or 4 weeks after you’ve subtracted the cost of quarterly estimated taxes, business insurance, and all your other regular expenses. (The mantra “pay yourself first” is still important—but in the case of cash flow hiccups, you may want to be 100% sure you can pay on time….and that’s okay.)‍

💸 Automatically deposit a set dollar value every 2 or 4 weeks. If you make extra money over your base average, come up with a standard percentage of extra profits you’ll invest back into the business vs. pocket and save.‍

Recap

• You completed the application process and were accepted for a new business bank account.

• You completed the required steps for account setup, including fulfilling any minimum deposits as necessary, linking autopay info, integrating with the bank’s software, and more.

• You figured out the best way to pay yourself and set up your paycheck (aka owner draw).