Setting Up Your Bank Accounts and Financial Infrastructure
The boring financial plumbing that every startup needs. Here's how to set it up without headaches.
Financial infrastructure isn’t exciting, but getting it wrong creates endless hassles. The right setup separates business from personal, enables fundraising, and makes accounting straightforward.
Here’s what you need.
Bank Account
Why You Need a Business Account
Legal separation: Mixing personal and business funds destroys liability protection.
Clean books: Business-only transactions make accounting easier.
Professional appearance: Customers and partners expect business accounts.
Fundraising: Investors wire money to company accounts, not personal ones.
Choosing a Bank
Traditional banks (Chase, Bank of America):
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Physical branches
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Established relationships
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Can be slow and bureaucratic
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Often require minimum balances
Startup-focused banks (Mercury, Brex, Rho):
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Designed for startups
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Fast online setup
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Good integrations
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No physical branches
Recommendation: Mercury is popular with startups. Chase or Silicon Valley Bank (if you’re in their ecosystem) for traditional options.
Setting Up
What you’ll need:
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EIN (Employer Identification Number)
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Certificate of Incorporation
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Articles of Organization (if LLC)
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Operating Agreement (if LLC)
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Board resolution authorizing account opening
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Personal ID for signers
Process:
1.
Apply online or in-branch
2.
Submit documentation
3.
Wait for approval (usually 1-5 days)
4.
Receive account details
Multiple Accounts
Consider separating:
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Operating account: Day-to-day expenses
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Payroll account: Just for payroll (if using payroll service)
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Savings/Reserve: Cash reserve not for operations
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Tax account: Set aside for tax payments
Separate accounts prevent accidentally spending reserved funds.
Credit Card
Why You Need Business Credit
Separate expenses: Personal and business clearly divided.
Build credit history: Company credit matters for future needs.
Rewards: Business cards often have good rewards.
Cash flow: 30-day float helps with timing.
Options
Corporate cards (Brex, Ramp):
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No personal guarantee (often)
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Spending controls
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Built for startups
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Require cash in bank or revenue
Traditional business cards (Chase Ink, Amex):
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Personal guarantee required
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Rewards programs
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Credit history required
Recommendation: Ramp or Brex if you qualify. Chase Ink if you need traditional credit.
Accounting Software
Why You Need It
Spreadsheets break as you scale. Accounting software:
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Tracks income and expenses
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Categorizes transactions
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Generates reports
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Integrates with bank/cards
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Enables tax preparation
Options
QuickBooks Online: Industry standard. Accountants know it.
Xero: Good alternative. Strong internationally.
Wave: Free option for very early stage.
Pilot, Bench: Outsourced bookkeeping + software.
Recommendation: QuickBooks Online is the safe default. Your accountant will thank you.
Basic Setup
1.
Connect bank accounts and credit cards
2.
Set up chart of accounts (categories for transactions)
3.
Configure invoicing (if applicable)
4.
Set up regular reconciliation
Payroll
When You Need It
As soon as you pay yourself or anyone else (including contractors in some cases).
Options
Gusto: Popular with startups. Easy to use. Good for small teams.
Rippling: More comprehensive HR + payroll. Good for growing teams.
Justworks: PEO model (they’re technically the employer). Simplifies compliance.
ADP, Paychex: Traditional providers. Enterprise-grade.
Recommendation: Gusto for most early-stage startups.
What Payroll Handles
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Salary payments
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Tax withholding (federal, state, local)
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Tax filings
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W-2 generation
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Benefits administration
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Workers’ comp
Don’t do payroll manually. The compliance requirements are complex.
Expense Management
For Small Teams
Credit card statements + accounting software is often enough.
As You Scale
Dedicated expense management helps:
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Receipt capture
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Approval workflows
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Policy enforcement
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Reimbursements
Options: Ramp, Brex, Expensify
Tax Preparation
What You’ll Need
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Quarterly estimated taxes (federal + state)
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Annual federal return (Form 1120 for C-corps)
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Annual state return(s)
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Payroll tax filings (handled by payroll provider)
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Sales tax filings (if applicable)
DIY vs. Accountant
DIY (early stage, simple):
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Use TurboTax Business or similar
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Works for simple situations
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Risk of errors
Accountant (recommended):
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CPA familiar with startups
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Handles complexity
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Provides advice
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Cost: $2,000-10,000/year depending on complexity
Recommendation: Get an accountant by your first full tax year, earlier if you’ve raised money.
Financial Calendar
Set up recurring tasks:
Weekly:
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Categorize transactions
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Review cash position
Monthly:
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Reconcile accounts
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Review P&L
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Update cash projections
Quarterly:
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Pay estimated taxes
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Review financial statements
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Cap table updates
Annually:
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Tax filing
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Annual report filings
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Audit prep (if required)
Choosing Service Providers
Finding an Accountant
Look for:
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Experience with startups
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Familiarity with your structure (C-corp, etc.)
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Responsive communication
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Reasonable rates
Sources:
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Referrals from other founders
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YC directory (if YC)
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Pilot, Kruze (startup-focused firms)
Finding a Bookkeeper
For early stage, you might use:
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DIY with QuickBooks
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Pilot or Bench (outsourced)
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Part-time contractor
As you scale, in-house bookkeeping or controller makes sense.
The Setup Checklist
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[ ] Open business bank account
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[ ] Get business credit card
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[ ] Set up accounting software (QuickBooks)
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[ ] Connect accounts to software
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[ ] Set up payroll (Gusto)
•
[ ] Find an accountant
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[ ] Set up financial calendar reminders
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[ ] Create chart of accounts
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[ ] Establish approval processes
Common Mistakes
Mixing personal and business: Creates legal and tax problems.
No accounting system: Creates tax season nightmares.
DIY payroll: Compliance mistakes are expensive.
Waiting too long for professional help: Earlier is cheaper than cleaning up messes.
Not tracking cash closely: Running out of money without warning.
Ignoring tax deadlines: Penalties add up.
Key Takeaways
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Open a business bank account immediately after incorporating
•
Use startup-friendly banks (Mercury) or traditional (Chase)
•
Get a business credit card for separated expenses
•
Set up QuickBooks or similar accounting software from day one
•
Use payroll software (Gusto)—never DIY payroll
•
Get an accountant by your first tax year
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Set up a financial calendar with regular tasks
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Separate accounts for different purposes (operating, payroll, reserves)
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