The Basics of Small Business Checking Accounts 

Small business checking accounts are necessary and valuable tools for businesses looking to increase efficiency in cash flow, minimize risk, and increase their profit margins. There are many benefits and factors to consider when opening a small business checking account in addition to your personal account, but if it seems overwhelming- let us outline the basics!


What’s the difference between a business and personal checking account?


Small business owners opening their business account for the first time will be happy to see that they are structured very similarly to what they are used to seeing in their personal checking account. However, there are a few key differences between the two including limits on the number of free transactions your account can process, limited free cash counting by your providing institution, and probably the most salient- the opportunity to use more advanced payment methods, like merchant services, to better serve clients who prefer to pay electronically. In fact, you must open a small business checking account for a customer to pay the company, and not you individually, with a credit card!

What are the benefits to opening a business checking account?

There are many benefits for small business owners when they open a small business checking account, and some of the most technical of these include the following: 

  • Entitlements (where a trusted business partner can access the account as well)
  • Extra Debit Cards (which can be lent to employees taking potential clients to dinner, for example)
  • Positive Pay (a fraud prevention system verifying checks made out to your business)
  • Personal Liability Protection (thanks to your business’ funds being separated from personal funds) 

Moreover, when your personal accounts are separate thanks to a small business checking account, your personal credit ranking is unaffected, your funds are protected from liability related to your business, and your clientele will view your business as more professional. 

Did You Know? 

Over 91% of small businesses in the USA 

use a business checking account! source

What to look for when deciding on a business checking account

Deciding where to acquire your small business checking account and what factors to consider when looking at different account providers is an important first step. Most accounts share characteristics like a minimum operating and opening balance, monthly service fees higher than those of a personal checking account, limits on the number of free transactions and cash counting possible, and whether or not the account could integrate with your preferred accounting software. [maybe plug bumgardner here?] Since a small business checking account is an important investment and tool for your business, let Bumgardner help make it as seamless and successful as possible!

How to open a business checking account

Once you have decided to open a small business checking account, the requirements needed to open said account may vary slightly depending on who you decide to bank with- but here is a list of the common requirements and documentation needed: 

  • Cash for an Initial Deposit
  • Your Business Plan
  • Two forms of identification (usually a government issued photo ID and a statement with your name listed will suffice)
  • Your tax ID number (aka: your Employee ID Number. Visit the IRS to acquire your EIN)
  • Business documentation (often a “Certificate of Good Standing” supplied by a Secretary of State’s Office or your state’s Division of Corporations )
  • Assumed name certificate (supplied by your county clerk’s office– this applies to sole proprietors who use their given name as part of their assumed name, eg. John Smith Roofing)
  • Beneficial owner information (these are people who own 25% or more of the business, and your provider will provide a simple form)

A small business checking account is a very necessary next step for any business owner looking to reach more clientele, create a more streamlined process for their finances, and minimize the risk they may be liable for. Here at Bumgardner Morrison, our staff is ready to help your business succeed- so we invite you to book a meeting with us to discuss your accounting needs.

Family Saving money. Asian baby girl daughter plan to spend the future in earnest, finance and saving, family and financial concept.

Are You Prepared?

Running or starting your own small business can be a daunting effort on its own; this coupled with financial burdens can push owners over the edge. In this everchanging world, everyone must stay financially prepared for the worst – especially small business owners. One of the best ways to safeguard your livelihood from unexpected financial crises is to keep practical steps in place to protect your business from financial ruin.

Plan Ahead

Do your research. Keep your eye on local and national data on how businesses in your industry are doing financially to ensure you stay profitable and sustainable. Take a peek into what your competitors are doing. By doing so you can use others as a guide for knowing what to avoid and  to see what is working. Edit your business model to include the new and emerging techniques in your industry.

Good Financial Habits

As a small business owner, you know something is always going on in your workplace. You are constantly in meetings, ordering supplies, delegating tasks – the list goes on and on. However, it should be one of your top priorities to set up internal financial meetings with yourself and whoever else on your staff who deals with financial matters. Use this time to familiarize yourself with your books; do this even if you are working with a bookkeeper. Doing so will allow you to have better insight into your business and financial expenses.

Get Your Rainy Day Fund Ready

Rainy days are sure to come. Setting funds aside every month for unexpected expenses can save you big time in the long run. You might run into storm damage, broken equipment or air conditioner repairs that can put a large hole in your pocket if you are not expecting them. By implementing a savings plan and account for your small business, you are sure to avoid major financial losses due to unexpected issues.

Set Goals

All successful business owners set goals for themselves. Make the goals you set for your business are both attainable and clear. To ensure you are meeting the milestones you want, consider creating “sub-goals” or goals within your goals that will help achieve your objective. Remember to review the goals you have set for yourself and your business regularly. To ensure they are realistic, relevant and achievable.

Peace of Mind

Finding a starting point for future-proofing your small business can be difficult if you are unsure of where to start. Luckily, with the help of Bumgardner Morrison, your business can achieve successful financial preparation. Contact us today for all your financial planning needs; our staff is ready to help take your business to  the next level while providing you with a peace of mind.
Businessman, accountant working in office. Bookkeeping concept

Tips for preparing your books for year-end

The end of year is quickly approaching, which means it’s about time to start planning your accounting records to be ready for the new year.

Closing your books helps you prepare for income tax time and allows you to get other financials in order to continue leading a successful business. We’re here to remind you that there are several things to consider when completing your year-end books so you don’t miss anything if you’re doing it yourself!

First off, what does it mean to “close your books”?

Think of all the financial transactions your company has done over the last year. You should have some sort of record on those transactions, otherwise known as “books”. They let you know, as the owner of the business, how much money is flowing in and out of your business and can help you set trends as well as gain insights for the future of your business.

Closing your books means you are officially finalizing those transactions, and they are recorded to show where your business stands financially.

So, how can you get ahead of closing your books?

Gather all your financials

Get your statements and financial records from your bank that date back to the beginning of the year. These statements are crucial for your accountant to prepare your end-of-year books correctly and efficiently. Instead of getting your information online, going to your bank directly can ensure you’re getting everything and not missing any important information.

Take inventory

Taking inventory is a step that many people don’t even think about when preparing their books. Assets and products need to be compared to your balance sheet from the beginning of the year to ensure there aren’t any major discrepancies. If there are some inconsistencies that you notice off the bat, be sure to note it for your accountant.

Budget for the year to come

When all is said and done for this past year’s books, you can now start preparing for your business’s future. Your accountant can help you budget for the upcoming year, which is important to understand if your business is operating within your means. Think of budgeting like a forecast that is dependent on your previous year. This is where you prioritize and set goals based on how the previous year went, so your business can grow in the upcoming year.

Don’t wait until the last minute

Some people thrive under pressure, therefore they procrastinate everything they do. Unfortunately, that isn’t the case with closing your books. Preparing all the documents and reconciling accounts takes a lot of time – weeks, or even months! To ensure your business is in good standing, you shouldn’t wait until the last minute to get things done. The phrase “the sooner, the better” is perfect to apply to this situation so you can continue to grow your business.
If you need help closing your books, or even just need some advice, our tax professionals at Bumgardner Morrison can help you! We provide complete tax services to ensure you and your business are prepared for the new year.

Business Loan

Thinking of a Business Loan? Here are 4 Reasons it’s a Good Idea

1. Starting a Business

Of course, one of the most popular reasons that people seek out a business loan is to, well, start a business. Revolutionary, right? The truth is, many people have great ideas for a business, but having the funds to start something from the ground up is a different story. Thankfully, many lenders give out business loans for this very reason alone.

Getting a business loan to start a business isn’t exactly easy, either. To prove this is a legitimate venture you want to seek out and not just an idea, going through the steps of establishing your business and getting an employee identification number (EIN) can increase your chances. Furthermore, setting a plan in place with goals and ways to grow the business can solidify your legitimacy to some lenders.

2. Getting Equipment

Whether you’re starting a business from scratch or you’re well-established, equipment is most-likely something that you need to account for as you build or grow your business. Depending on the type of equipment you’re looking for, it can get a little pricey, and if you’re just starting your business, you might not have the allocated funds to make such a large purchase.

There might be multiple things you need – machinery, computers or a software subscription for multiple employees. It’s a good idea to determine what you need that is going to help your business grow and increase revenue to ensure that a business loan is the smart financial move.

3. Purchasing a New Location

So your business is doing well. That’s great! But now you’ve outgrown your current space and need to move to a bigger office, or maybe you’re interested in moving to a better location that will help your business grow. Whatever the reason may be, a business loan can definitely help you out. Depending on how long you’ve been in business, you can get better rates on a loan.

4. Marketing

It’s no secret that marketing is one of the best things a business can invest in to help get reach potential customers. Marketing can also get really expensive, but it can be ultimately worth it if it’s executed well and does its job. Whether you want to hire someone to create a radio jingle for you, design a billboard or hire a marketing company to handle your SEO, these expenses add up.


There are many great things about securing a business loan that can help you grow your business and revenue. Doing your research to determine the best ways to distribute the loan and ensuring it goes into the business is the best way to make sure you’re doing right by your company and properly paying the loan over time.


At Bumgardner Morrison, we want to help you and your business succeed. We can offer advice on taking out a business loan, the best ways it can benefit you, and how it will impact your taxes. Contact our office today!

Small Business Accounting Advice

What the CARES Act Means for Your Business

The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, is a $2 trillion stimulus bill that was signed on March 27. This historic government funding dwarfs the two rescue packages from the Great Recession. It is aimed at supporting large and small businesses, industries, individuals, families, gig workers, independent contractors, and hospitals. But, its hefty price tag, quick signing, and less than stellar rollout have left many individuals and businesses wondering how it will relieve their burdens.

1. Paycheck Protection and Loan Forgiveness

The Paycheck Protection Program offers guaranteed loans of up to 250 percent your monthly payroll average, based on your previous year’s numbers. This loan is designed to allow you to continue to pay your workers during these difficult times. If your business is eligible, you can obtain this loan anytime between February 15 and June 30.

The portion of the Payment Protection loan spent on payroll, rent, mortgage, interest, or utilities is also forgivable by the SBA as long as all employees are kept on the payroll for eight weeks. Any portion of the loan that is unforgivable will be treated as a two-year loan with a 1% interest rate. However, payments on this amount will be deferred for 6 months. While the current Paycheck Protection Program funds have been accounted for and are set for distribution, Congress is working diligently to provide additional funds to continue offering the program to assist businesses.

2. Unemployment Benefits

Unemployment benefits are also being extended. Individuals that can qualify for unemployment now include those diagnosed with COVID-19, have a household member with the disease, are caring for someone with the disease, or are quarantined due to the disease. It also applies to individuals who cannot go to work due to coronavirus, is unable to begin their job, has become a widower of someone who was diagnosed with coronavirus and was the primary money maker, someone who quit due to coronavirus, and if your business closed. In addition, gig workers and self-employed workers are also covered under the CARES Act.

3. Penalty-Free 401(k) Withdrawals

Typically, if you’re younger than 59 1/2, the IRS slaps you with a 10% penalty when you withdraw money from your 401(k). But under the CARES Act, you can withdraw up to $100,000 penalty-free during the 2020 fiscal year to ease financial hardships caused by the coronavirus.

Withdrawal will still be subject to your ordinary income tax rate, but instead of paying the lump sum this year, you can disburse payments over a three-year term.

4. Employee Retention Credit

To encourage businesses to keep employees on their payroll during the slowdown, the IRS is offering a refundable 50% tax credit of up to $10,000 in wages paid by an eligible employer.

An eligible employer is defined by a business that is temporarily suspended in any form due to coronavirus, or that is making less than half its average revenue.

Employers can immediately claim the tax credit by withholding taxes that they would otherwise deposit each quarter. If credits exceed their tax liability, then employers can file a Form 7200 to receive an advance refund.

5. Employer Payroll Tax Delays

Ordinarily, business owners collect 6.2% of their employees’ wages for Social Security Tax and then match their contribution dollar for dollar. But the CARES Act allows employers to delay paying their portion of payroll tax in full until December 31, 2022, with at least 50% being due by December 31, 2021.

It is important to note that all businesses are approved for the deferral, but if you receive a loan under the SBA’s Paycheck Protection Program, you will not be eligible.

6. Paid Leave

Under the Families First Coronavirus Response Act, businesses with fewer than 500 employees will receive tax credits for the cost of providing paid leave to employees if taken for specified reasons related to COVID-19.

The tax credit will reimburse employers for 100% of the employee’s salary and health insurance costs. Employers will also face no payroll tax liability for the paid leave.

Final Thoughts

Don’t try to navigate these muggy waters all by yourself. Working with a tax and accounting expert is the best way to make sure you take advantage of the new stimulus package. If you have additional questions regarding the CARES Act, we recommend you visit the IRS’s page for Business Tax Relief

A CPA sitting at a desk with financial forms in front of him

Going out for Bids: When Cheaper Isn’t Better

Many companies and organizations are required to undergo some type of attestation service each year (compilation, review, or audit). As part of this process, many times bids are solicited from different firms in order to find the best deal, which, from a Board Member’s perspective, usually means the cheapest price. As a former Board Member and Treasurer of Golden Crescent Habitat for Humanity, I understand the desire to cut expenses as much as possible. However, cheaper is usually not better. In order to perform attest services in Texas, a CPA firm must enroll in the AICPA Peer Review Program and be subject to an independent review of their attestation practice every three years. As a Peer Reviewer through the Texas Society of CPA’s and the AICPA, I see firsthand how many firms will charge significantly less for the same service but not perform the work in accordance with professional standards. Therefore, when going out for bids, I recommend that Board Members perform the following due diligence in order to make sure they are getting a high-quality CPA firm:

1. AICPA Peer Review Public Report

Obtain a copy of the firm’s most recent peer review report from the AICPA Peer Review Public File. A CPA firm can receive either a pass, pass with deficiencies, or fail report. Both the pass with deficiencies and fail reports are considered to be substandard and require corrective action by the firm.

2. Industry Relevant Experience

Ask the firm how much experience they have in the particular industry they are bidding on. Is this their only attestation service in this area? In addition, is this an area that requires specialized knowledge (specifically employee benefit plans or Single Audits)?

3. Check For Corrective Action or Monitoring

Is the firm currently undergoing any kind of corrective action or monitoring by the State Society or State Board of Public Accountancy?

4. Continuing Education

What kind of continuing education does the attestation personnel receive each year?
Expertise You Can Trust
Bumgardner Morrison is a full-service CPA firm that performs attestation services to clients of many different industries including employee benefit plans, electric cooperatives, financial institutions, non-profit organizations, nonpublic companies, and governmental entities. Three of our partners perform peer reviews on other CPA firms throughout the State of Texas. Please contact us today if you would like more information on any of the services that we provide.
Calculator in a tax form with a pen pointing to tax implications

8 Things You Should Do To Prepare For The 2020 Tax Season

It’s hard to believe that the end of the year is upon us. If you are like most people, then you are probably focused on the holidays and spending time with family and friends. Taxes are the furthest thing from your mind. While it’s fine to take a few moments to focus on the finer things in life, at some point, you will need to consider your taxes. The sooner you think about them, the less stress you’ll have to deal with later. After the New Year, it won’t be long before tax season is upon us. To get ready for the 2020 tax season, there are eight things you can do now to prepare.

1. Get Organized

Having all of your tax information in one place that is easy to access will be beneficial when the 2020 tax season rolls around. You’ll have an idea of what your income and spending was, and you’ll be able to tell if you are missing any important documents. Getting organized will make the tax filing process go faster, smoother, and more accurately so that you can get on with your life. As part of your organization process, make sure you are holding onto receipts and other necessary documents to track your deductions. This could include medical bills, donations, local tax payments, travel expenses, mileage, or retirement contributions. It’s always better to have more documentation, so pull together everything you have and keep it in a file or folder that is easy to find and access.

2. Read Up on the New Tax Laws

With new tax laws taking effect, this could have an impact on how you file your return. To reduce the surprise and shock when you are getting your taxes done, take a few moments to read the new information. You may not be able to understand it all, but if you have a basic idea, you’ll know what questions you need to ask a tax professional so that you are aware of exactly how these new rules will impact you. Most importantly, make sure your accountant is up to date on these new laws.

3. Adjust Your Withholding

After you read about the new tax laws, you should then take the time to adjust your withholdings. In the past, many people were expecting to get refunds, only to find out that they owed because they weren’t having enough taken out of their checks. Don’t let this happen to you. If you are unsure how much you should be withholding, you can head to the IRS website for assistance or talk to a professional accountant.

4. Add to Your Retirement Account

In addition to checking your withholding amount, now is a good time to also look at your retirement accounts. Not only do you want to make sure that you have enough money to be comfortable when the time comes to retire, but adding to your retirement account comes with additional tax benefits. If you have a traditional retirement account, you can contribute to it without any tax penalties.

5. Plan Your Write-offs

If you know that you will be able to itemize or if you have business expenses that you can deduct, then it’s a good idea to start planning your write-offs in advance. Preparing your deductions ahead of time will not only save you the headache later on but also can assist you in making wiser purchasing options as the year comes to an end. For example, you can purchase and write-off new equipment costs instead of taking the depreciation method that is most often used. But first, to know that you are making the right decision, you might consider consulting with a tax professional.

6. Consider Your Liabilities

Liabilities can be confusing when it comes to your taxes. Whether you are expecting a year-end bonus or get high capital gains from a mutual fund, knowing this in advance will help you calculate taxes and what you may be expected to pay. Since you don’t want to get surprised with a high tax bill in April, taking this step now will help you prepare for the 2020 tax season.

7. Pay Your Taxes on a Quarterly Basis

To save yourself from potentially having to pay a considerable amount when tax season rolls around, you might consider estimating and paying your taxes every quarter. This could save you from any stress or surprises that may arise in April. It also allows you to plan for and make more affordable payments throughout the year. The best way to accomplish this task is to look at the previous year’s records, including the number of deductions, taxable income, and credits, among others you recorded. You also have the option of talking to an accounting professional to help with this step in the preparation process.

8. Work with a Professional Accountant

It has been mentioned several times throughout this article that you have the option of working with a professional. As a way to get prepared for the 2020 tax season, this may be in your best interest. Not only will they be able to answer any financial questions that you might have, but they’ll be able to tell you exactly what you’ll need to make filing your taxes pain-free, error-free and efficient.
It’s Never Too Early
You may not be focused on tax season at the moment, thinking that you want to get through the holidays first. However, time goes by fast, and before you know it, it will be April and time to file with the IRS. Don’t put off thinking about your taxes or getting prepared for the 2020 tax season for too much longer. The sooner you get this done, the less you have to stress about. One of the reasons taxes are so hard for people to deal with is because they don’t know what to expect. By getting ready now, you’ll have an idea if you have to pay or if you are owed. You’ll also know if you have all of the information you need to file your taxes accurately. If you don’t, you’ll have plenty of time to track down the documentation. Working with a tax expert and being organized is the best way to reduce stress and be prepared for the 2020 tax season, as well as those to come.  At Bumgardner Morrison, we’re here to assist with your accounting services needs in Victoria, TX. Contact us today to schedule your consultation to get ahead of this tax season!