Setting Up Your Bank Accounts

When you're running a business, your banking needs are likely to be different from your previous personal needs. While you can make do by running your eBay payments through your personal savings and checking accounts, it's much cleaner to establish a separate banking identity for your business. This way it's clear which funds are personal and which are business-related.

Merchant Checking Account

The best business practice is to set up a merchant or business checking account separate from your personal accounts. While you're not required to do this, it will make your recordkeeping easier. Having a bank account in your business name should also minimize any potential confusion when it comes to depositing or cashing checks made out to your business name or dba.

To set up a merchant account, you'll need that fictitious name affidavit we talked about earlier. If you're running a partnership, the partnership's bank account should be separate from all the partners and should require more than one name on the checks. (That's to protect against any one partner running off with all the funds.)

Note

Rather than setting up a specific merchant account, it may be easier (and cheaper) to set up a second personal accountespecially if you're a sole proprietorship. The important thing is to set up a separate account; it doesn't have to be a literal merchant-type account.

Dealing with Credit Card Payments

While you're at the bank, you should ask about what's involved in establishing a merchant credit card account. You'll need to accept credit card payments for your eBay auctions, and if you can easily and affordably set up a merchant account with your bank, all the better. Know, however, that most banks make it difficult for small businesses to do this; you're probably better off going with PayPal for your credit card payments.