Growing wisely: Who should have access to your business accounts?

As your business grows, you may wonder which team members should have access to your business checking account.

If you keep the account in your name only, you’ll waste time performing tasks that could be delegated to someone else. Having sole access also means your business comes to a halt if you’re incapacitated or out of reach. But if you add too many people — or the wrong people — you could put your business’s money at risk.

Once you decide how many people to include on the account, you need to decide which staff members should have access. Should you add your accountant’s name? Payroll manager? Bookkeeper? Executive assistant? How can you be certain that giving someone the power to withdraw funds won’t expose your business to corruption or embezzlement?

Considering all these angles turns a seemingly simple decision into a complex headache. Luckily, there are some simple guidelines you can follow, and some strategies you can use to minimize your risk exposure.

Factors to consider with business account access

There’s no formula for choosing who to add to your account, but there are certain elements to consider.

Transparency and oversight

Are there people in your organization who have as much right as you do to view the cash flow of the business? If you have a partner, for instance, they might feel like you’re keeping them in the dark if you’re not sharing access to the accounts.

If your business is organized as a corporation, your board chair or treasurer might want to crosscheck your bank balances to your financial statements. It’s a good practice to demonstrate transparency with your board.

Financial oversight is wise no matter how your business is organized. Most companies will benefit from having at least two people look at the accounts regularly to prevent errors or fraud.

Convenience and efficiency

To identify the best people to add to your account, look for the bottlenecks in the flow of money in your business.

Are bills or vendor payments delayed because the right people aren’t authorized to pay them? Can your staff get the supplies they need in a timely manner? Does your bookkeeping staff have access to the information they need on a daily basis?

Look at your own workflow as well. What financial tasks are you doing that could easily be done by someone else if they had access? Paul Sloane once said, “Only do what only you can do.” When business owners delegate more tasks, they have more time to strategize and innovate within the company.

Security

Delegating and creating transparency are important, but so is safeguarding your business’s cash. You need to balance convenience against risk by limiting the number of people who can manage your funds to a tight group you completely trust.

If only two or three people have access to your accounts, it’s much easier to track what each person is doing than if there are five or more. With each additional team member who can get into the account, you dilute everyone’s accountability.

If money vanishes from the business account, you need the ability to quickly track down who moved the funds, where they went and whether it was a legitimate, authorized expense or a fraudulent transaction. That’s much easier to do if only a handful of people have your bank credentials.

Legal factors and bank policies

Bank policies and state laws might limit who you can add to the account. For example, nonprofit organizations are generally only allowed to have board members as signatories, and some banks only allow specific board officers, like the president and treasurer, to have access.

Most banks will only allow an owner to open a business account. In the case of corporations, you’ll see restrictions like “must be an owner of at least 25 percent of the business or an authorized officer.” However, once the account is open, the owner can add other people to the account.

Warning: Online access is full access

A few decades ago, the only way to give someone access to your funds was to add their name to the account as a signer. Only authorized signers could make withdrawals, write checks or have a debit card.

Things have changed since then.

For example, you might be tempted to give a staff member your username and password so they can download statements for bookkeeping or make mobile deposits through an app. But if you give someone your login credentials, they can transfer funds, request a cashier’s check, wire money or connect the account to an app like Zelle, Venmo or CashApp and instantly send money to anyone they choose — all while they’re logged in as you. It doesn’t matter that their name isn’t on the account.

By the time you notice what’s happened, it could be too late to get those funds back. Plus, if you’ve shared your login with more than one person, it might be very difficult to track down who authorized those transfers.

6 strategies for managing risk

Since each person you add to the account magnifies your exposure to fraud, you’ll need some strategies to secure your funds. Here are some tips to keep your bank account safe.

1. Limit access

The best way to manage risk is by restricting the number of people who can access your account. How many people is the right number? It depends on the size and complexity of your business.

For transparency and oversight reasons, it’s good to allow at least two people to access the account. As your business grows, you may need to add more people — but think hard about each person you add beyond those first two.

One strategy for more complex businesses is to have multiple accounts with very few people having access to each one. For example, if you need to allow someone to handle payroll, consider opening a separate payroll account and depositing only what’s needed each month into that account. That person only needs access to that one account.

You can also move excess funds into a business savings account to earn interest and limit the number of people who can access them.

2. Never share your login

Don’t share your username and password with anyone — not even your accountant or trusted assistant. If you want to give online access to someone, add their name officially to your account and ask your bank to give each user a unique login.

That way, at least you’ll be able to see who is taking each action that affects your account, and everyone knows they’ll be held accountable.

3. Screen carefully

Before you add someone to your account, do a credit and criminal background check. Dozens of providers perform background checks for employers, with prices starting at under $50.

You’ll need the employee’s permission, but trustworthy people will understand why you need to run a check before adding them to your account.

4. Deposit physical checks

If your business only handles checks occasionally, it may seem easy and efficient to deposit them through your bank’s phone app. But your staff can’t use the app unless you share your login, so it’s more secure to drive checks to the bank and deposit them in person.

Some banks, such as Wells Fargo and Bank of America, offer deposit-only ATM cards for business accounts. These cards allow staff to make remote deposits without giving them withdrawal privileges.

If you process a lot of check payments, you can get a check scanner device so your staff can deposit checks directly without using the bank’s app.

5. Use credit cards

If you want your staff to be able to pay vendors and make purchases, consider getting credit cards for them.

Many business credit card providers will issue an individual card for each employee, which allows you to track each person’s spending. Credit cards give your staff the power to make purchases and pay vendors without giving them the capacity to move your funds out of your checking account.

6. Create checks and balances

As your business banking gets more complicated, take time to create accountability systems. Assign two people to review the accounts periodically and verify that all the withdrawals are legitimate. Even if you have an accountant reconciling your statements every month, someone else should be reviewing them as well to make sure nothing is missed.

Pro tip: Don’t overlook small amounts. Some employees have embezzled large amounts of money by making small payments to themselves over long periods of time.

Next steps

Giving team members access to your accounts can improve efficiency and transparency for your business. However, each person you add to the account increases your risk. It’s usually better to give employees credit cards to take care of expenses and limit checking account access to a small group, with a different login for each user.

If you’ve already granted access to several staff members, you might want to review those decisions and make any adjustments necessary to protect your business accounts.

If you’re the only one on the account, consider adding at least one trusted person. Your partner, assistant, treasurer or bookkeeper can help you with financial tasks and share oversight duties with you. Run a background check before you put their name on the account, and ask your bank to issue them a unique login. You’ll then have the advantages of convenience and oversight without risking your business funds.