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Micro-Biz-Beat: The
Heart of Micro Busines
Providing information relevant to San Diego small and
micro businesses, owners, and entrepreneurs, with a focus on the
truly "small" and minority-owned businesses.
Editor: Claudia Pires Klaus;
Assistant Editor: Michelle S. Butler
Edition 2, April 2007:
Banking Options & Best Practices
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Best Business Banking
Practices: Advice from USA Federal Credit Union
Most small
business owners do not think it necessary or even optimal to
maintain separate personal and business accounts. The
thought of having to juggle funds from one account to another
due to low cash flow, or having to "rob Peter to pay Paul" is
overwhelming. Not to mention the amount of time it
takes to make those transactions and the fear that the tiniest
mistake can result in endless fees and headaches.
USA Federal Credit Union believes, however, that every small
business owner, no matter how small, must separate personal and
business funds as soon as possible.
Commingling
Funds, an IRS Nightmare
Jere Batten, CPA, CFE, and owner of Batten
Accountancy, Inc., agrees. “It’s important for
small business owners to run their business as a separate entity
and not just an extension of themselves,” says Jere.
Batten Accountancy is a
full service
accounting practice in Ocean Beach, CA that specializes in
working with new, start-up companies. Their approach is to
educate business owners on the Do’s and Don’ts of accounting.
According to Jere, keeping track of and analyzing your business
is much easier for you and your accountant if you resist the
urge to commingle personal and business activities. If it is all
jumbled together, someone has to extract the business income and
expenses before your tax return or financial statements can be
completed. Keeping the activities separate will save both time
and money.
Credit Unions, The Best Kept Secret: A viable alternative for
small business
Many
credit unions offer the same types of business accounts you
would find at any large commercial bank. According to USA
Federal Credit Union there is one major difference; they offer
personal service to their members with much better rates and
lower fees. For some, credit unions are a viable
alternative to traditional banks. Some
of the benefits touted by the credit unions are as follows:
You can have your own personal banker ... just like Bill
Gates
USA Federal Credit Union has developed a basic small
business checking account offering the affordability and
personal relationships we all want. If you think you can’t
qualify, think again. USA Federal Credit Union's minimum
account balance is a whopping $100.00. Their goal is to
provide all of the products and services required to meet
the needs of their business clientele.
You are more than a number on a piece of paper
USA Federal Credit Union understands how important it is for
small business owners to develop a strong relationship with
their banker; they not only suggest those practices, they
foster those business practices through their landing
reviews.
Also,
if you are audited as a small business owner with a schedule
C, the IRS will request business as well as personal
documentation. If all the business activity is run through
one separate business checking and/or one credit card
account; the information is more concise and the IRS is less
likely to dwell into the details on the personal bank
account.
Jere recommends that all small business clients maintain a
separate bank account for their business. When the business
owner needs money, they can simply write a check out of the
business account and make a deposit into their personal
account. If you have established a good relationship with
your banker, the transaction can be done in a New York
minute.
The History of USA Federal Credit Union
USA Federal Credit Union was established in 1953 at the
Naval Training Center in Point Loma. USA Federal Credit Union is
a federally chartered financial institution which comes with
many advantages. All members are “member owners”; therefore any
profits are redirect to the members in the form of lower rates
on loans and higher dividends deposit accounts.
In addition to offering full service banking to individuals, in
2005 the Credit Union decided to offer business services to the
San Diego, Riverside and Las Vegas communities. In researching
the business market, they discovered over one thousand of their
current members were using consumer accounts for business
purposes which reinforced their opportunity to serve the
business community.
“Money and
You”
Internet Radio Show Offers Global Reach
Starting in August, 2006, USA Federal Credit Union launched a
pioneering Internet radio show called “Money & You.” To date,
they believe it is the only credit union sponsored Internet
radio show in America. Each week, the topics are designed to
educate inform the audience about important financial subjects.
Mary Cunningham (President/CEO), Nicole Anderson (Vice President
of Marketing & Public Relations), and Alistair Harper (Chief
Operating Officer) host the show.
Each week,
the guests of Money & You” share their unique financial insight
with co-hosts from USA Federal. Archives are available for
on-demand listening, via RSS feeds and pod casts. Just visit
www.usafedcu.org and click the link on the Home Page to
access “Money and You” carried on the Entrepreneur Network and
broadcasted by wsRadio, number one in talk radio.
All the “Money & You” shows are archived on the site too. So, if
you have missed previous shows, just navigate the site and
listen to the excellent content at your leisure. Better yet, you
can share the URL with friends and colleagues so they can
benefit too!
Click logo to visit the Money and You homepage
Giving
back to the community
The founding philosophy of the credit union movement is
“people helping people”. USA Federal Credit Union is devoted
to this philosophy and in 2006 contributed over $340,000 in
charitable donations and sponsorships to support the
communities and surrounding areas where they serve. These
funds represent a significant percentage of USA Federal’s
2006 Net Income which positions USA Federal Credit Union as
a large philanthropic cash contributor, larger than many
for-profit corporations and banks when donations are
compared as a percentage of pretax profits.
USA Federal Credit Union continues to live up to its promise of “people helping people” and in 2007 the USA Federal added the WBCC to the list of sponsoring organizations. The credit Union recognizes the importance of the Women’s Business Center of California as a leading force to empower starting business to grow and thrive.
WBCC Founding Sponsor
USA Federal Credit Union has assisted with the establishment
of the WBCC by providing the WBCC interim office space and
technical support during its period of restructuring and
remerging as its own organization. USA Federal Credit
Union's 2005 expansion introduced a wide-ranging variety of
new financial services designed to assist new and existing
businesses.
"The growing number of women owned businesses just can't be
ignored," says Mary Cunningham, President/CEO of USA Federal
Credit Union. "The financial community has a responsibility
to provide valuable resources to help women succeed in
business and USA Federal is honored to help the WBCC fulfill
its mission."
Nicole Anderson, USA Federal's Vice President of Marketing
and Public Relations states that "Current and future
business owners in San Diego and surrounding communities are
fortunate to have an organization like the WBCC serving the
specific needs of women in the small business community. USA
Federal Credit Union values the opportunity to help the WBCC
achieve the structural independence it needs to thrive for
years to come."
Other local organizations supported by USA Federal Credit
Union are: MWR (Moral, Welfare, and Recreation), Navy League
and other groups that support the military community,
Children’s Hospital of San Diego and Las Vegas, San Diego
Children’s 10Mobile, San Diego Zoological Society, The
Challenge Center, Special Olympics, Cystic Fibrosis
Association, National Multiple Sclerosis Society, United
Way, Marin P. Cassell Scholarship, San Diego City School’s
“Partner in Education” program and other school and youth
programs, just to name a few. To learn more about USA
Federal Credit Union’s community and financial education
outreach, visit the “Community Partnership” and “In the
News” web pages available form “News and Events” at
www.usafedcu.org.
A Personal
Story:
As editor of Micro-Biz-Beat, I am pleased to share my own
experiences with the community as it relates to the topics
covered. As a small business owner, I have experienced the
same challenges of getting established and growing a business.
When I was starting out, I too was frustrated by the lack of
services geared toward small businesses, but, I believed that it
was something I just had to accept and deal with as best I
could. That was until I had the good fortune of meeting
Neva Buckhanon, Regional Business Development Manager from USA
Federal Credit Union at a local NAWBO meeting.
Neva and I met for lunch one day. She schooled me on her
role at the Credit Union as well as the membership benefits, and
I shared with her my frustrations with my larger bank I was
working with at the time. Of course, Neva took that
opportunity to present me with a superior opportunity via
working with USA Federal Credit Union. Ever the skeptic, I
responded with a sarcastic "sure you can.”
I just believed that I was simply too small to be treated well, so I was pleasantly surprised when Neva later e-mailed the few, simple pages I had to complete to open up my new business account with the Credit Union. Upon completion, Neva actually came to my office in order to personally introduce me to my very own personal banker, Carmie!
I couldn't believe how easy
small business banking could be; I thought I died and went to
heaven! To this day, Carmie continues to take care of all
my banking needs; she knows me by name and understands my
situation and unique needs.
This was one time when I was happy to be proven wrong. In
the eyes of USA Federal Credit Union, small businesses do
matter.
-
Claudia Pires Klaus, Pacific Advisors, Inc.
Keep Business
and
Personal
Bank Accounts Separate !!!
