How to Receive Payments for a Home Business

Once your home-based business becomes profitable, you will need to take steps to receive payments in a professional way. Separating your home business funds from your personal funds is always a good thing. With a few short tips, you will be able to turn your home-based business into a smoothly running one that is ready to receive payments. Read on to learn how to receive payments for a home business.

Instructions

Difficulty: Moderately Easy

Things You’ll Need:

• Bank accountant
• Tax id number
• Business name
• Internet
• Merchant account

1. Set up a bank account for your home business. Even if customers make checks payable directly to you, deposit the funds into an alternate bank account separate from your personal funds. Sorting out your business finances during tax time will be less complicated. You will be able to easily provide accurate totals and receipts for business expenses. If you decide to incorporate your home business, then set up a business checking account in order to deposit customer payments.
2. Apply for a tax id number from the IRS. You will definitely need this when opening a home business bank account. Gaining a tax id number is an easy task to complete. Just fill out the IRS Form SS-4 and mail it or fax it back to the IRS office. Getting access to this form can be done by visiting the official IRS website. Within two to three weeks you will receive your tax id number.
3. Apply for a fictitious business name. Many home business owners decide to remain a sole proprietorship. Instead of doing business under their own name, they can choose to do business under an alternate name. Register your new fictitious name with your city or state before you open a brand new business bank account. Some states will require you to go to your local county office and pay a specific registration fee to the county clerk.
4. Apply for a merchant account. Some customers prefer to pay for products or services with credit cards. In order to receive credit card payments as a home business owner, you will need to set up a merchant account. Accepting credit card payments requires a credit card merchant account, a bank account and an option to process these payments. Your customers will be able to pay you via Mastercard, Visa, American Express and other credit cards. The funds will then be transferred to your chosen business bank account.
5. Set up a PayPal account. Home business owners that do not want to deal with merchant accounts can choose to create a PayPal account. Customers will be able to send payments to you via an email address. The funds will be easily transferred from their designated checking account or credit card and on its way to you. Customers will be able to make purchases from your home business website with ease. Sales funds will be sent directly to your chosen bank account within moments.