Why do we need a bank account?

The most common reasons for why you should have a bank account are record keeping, credibility, and theft prevention. Expand each section below to learn more.

A nonprofit is a business, and keeping track of your money is a must. Stashing cash in a shoebox or tracking funds on scraps of paper will only cause headaches down the road. A bank account makes it easy to see where your money is going.

Even better? Pair it with accounting software to keep things crystal clear. Bank accounts should be reconciled monthly, with reports and bank statements available to all to review.

Having a bank account in your organization's name makes you look professional and trustworthy. It allows you to write checks and use a debit card, giving you more control over how money is handled.

Plus, potential donors will feel more comfortable giving when they can write a check and get proper documentation for tax purposes.

Keeping money in a secure bank account is the best way to prevent theft or mismanagement. Setting up safeguards like requiring two people to sign checks, for example, adds an extra layer of protection.

Sadly, theft happens more often than you’d think. Taking steps now to secure your funds can save your organization from a financial nightmare later.

banking

Looking to open a bank account?

  • A corporate bank account can’t be opened without an EIN. We’ll obtain your EIN as soon as your Articles of Incorporation are approved.

  • Make sure to choose the correct type of corporation when you apply for an account. If available, select nonprofit corporation. Otherwise, select other or nonstock corporation.

    For more information on why this is important, read our blog C Corp, S Corp, or Nonprofit: When Opening a Bank Account, Which Box Should a Booster Check?

  • Need help finding a bank? Want to collect payments from your members? Our friends at Crowded can help simplify your workflow.