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When I invoiced this company, my invoice specifically said to make it payable to me personally, not my business (since I don't have a business account besides PayPal). Unfortunately, they made it out to my business instead (and not even spelling it right).

How would I go about getting it deposited? I'm almost tempted to just write my name next to it.

EDIT. I just started using my PayPal account, makes it all easier. A least for now. I'm trying not to have more than one bank I use if I can help it.

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check with your bank if they'll accept endorsement. be prepared to prove your identity, your business identity and the signature rights. Not writing it as an answer because it is a wrong thing to do. Check @bstpierre's answer for how to do it right. –  littleadv Apr 13 '12 at 19:17
    
It pisses me off that everyone's answer is "open a business checking account". It would be ASININE for me to pay for a checking account when my business is so new and I'm barely making any money. –  user7084 Aug 28 '12 at 14:06
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@Mike - Sorry to hear that you're frustrated. You don't have to pay for an account, though. Check with your local banks -- for low transaction volumes, there are at least three local banks near me (NH, USA) that offer free small business checking. They will probably require you to have a certificate from your secretary of state, or a business license, or some similar local equivalent. –  bstpierre Aug 29 '12 at 3:03
    
Can you have the client re-issue the check? –  Matthew Sep 18 at 22:33

6 Answers 6

You should have a separate business account. Mixing business and personal funds is a bad practice.

Shop around, you should be able to find a bank that will let you open a free checking account, especially if you are going to have minimal activity (e.g. less than 20 of checks per month) and perhaps maintain a small balance (e.g. $100 or $500).

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US Bank offers free checking business account (usbank.com/small-business/checking/…) –  littleadv Apr 13 '12 at 19:16
    
Only issue is that I don't make enough to justify even having another account. So for now, presume that I'm not opening a business account, any way to do it? –  Joseph Apr 13 '12 at 21:10
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@Joseph what does "making enough" have anything to do with it? Your business is (supposed to be) a separate entity, and as such - have a separate bank account. –  littleadv Apr 13 '12 at 21:15
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@Joseph justification may come in at tax time when you need to separate your personal expenses from your business tax-deductible expenses. Or when you need to deposit checks made on the name of your business. Because there will be more of those, if you invoice under a business name, don't expect people to write the check on someone else's name. –  littleadv Apr 14 '12 at 6:43
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@Joseph: so you make enough to justify having a business, but you don't make enough to open a separate banking account? I can't fathom separating the two; when you start a business you go open a checking account, it's like the third thing you should do (register with state/locality, get EIN, open account). OTOH, I've done freelancing in my own name -- no business (no DBA, no LLC, etc) -- and in those instances the checks were made out to me since my name was on the contract. DJClayworth's answer says why a business will be wary of writing a check directly to you when they hired the business. –  bstpierre Apr 14 '12 at 22:51

When a business asks me to make out a cheque to a person rather than the business name, I take that as a red flag. Frankly it usually means that the person doesn't want the money going through their business account for some reason - probably tax evasion. I'm not saying you are doing that, but it is a frequent issue.

If the company makes the cheque out to a person they may run the risk of being party to fraud. Worse still they only have your word for it that you actually own the company, and aren't ripping off your employer by pocketing their payment. Even worse, when the company is audited and finds that cheque, the person who wrote it will have to justify and document why they made it out to you or risk being charged with embezzlement. It's very much in their interests to make the cheque out to the company they did business with.

Given that, you should really have an account in the name of your business. It's going to make your life much simpler in the long run.

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Considering it's side work that doesn't pay me much more than maybe a couple hundred a year, there's no justification to having a separate account. And this didn't answer my question. –  Joseph Jan 31 at 18:00

If you sign the check "For Deposit Only", the bank will put it in your account. You may need to set up a "payable name" on the account matching your DBA alias. However, having counted offerings for a church on several occasions, I know that banks simply have no choice but to be lax about the "Pay to the Order Of" line on checks. Say the church's "legal name" for which the operating funds account was opened is "Saint Barnabas Episcopal Church of Red Bluff". You'll get offering checks made out to "Saint Barnabas", "Saint B's", "Episcopal Church of Red Bluff", "Red Bluff Episcopal", "Youth Group Fund", "Pastor Frank", etc. The bank will take em all; just gotta stamp em with the endorsement for the church. Sometimes the money will be "earmarked" based on the payable line; any attempt to pay the pastor directly will go into his "discretionary fund", and anything payable to a specific subgroup of the church will go into their asset account line, but really all the cash goes directly to the same bank account anyway.

For-profit operations are similar; an apartment complex may get checks payable to the apartment name, the management company name, even the landlord. I expect that your freelance work will be no different.

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Depending on where you are, you may be able to get away with filing a "Doing Business As" document with your local government, and then having the bank call the county seat to verify this. There is generally a fee for processing/recording/filing the DBA form, of course. But it's useful for more purposes than just this one. (I still need to file a DBA for my hobby work-for-pay, for exactly this reason.)

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I have checked with Bank of America, and they say the ONLY way to cash (or deposit, or otherwise get access to the funds represented by a check made out to my business) is to open a business account. They tell me this is a Federal regulation, and every bank will say the same thing. To do this, I need a state-issued "dba" certificate (from the county clerk's office) as well as an Employer ID Number (EIN) issued by the IRS. AND their CHEAPEST business banking account costs $15 / month. I think I can go to the bank that the check is drawn upon, and they will cash it, assuming I have documentation showing that I am the sole proprietor. But I'm not sure.... What a racket!!

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If you're a sole proprietor there's no reason to have a separate business account, as long as you keep adequate records, as you are one and the same for tax purposes. My husband and I already have 5 accounts and a mortgage with one bank. I don't see the need to open up yet another account. As a contracted accountant, I don't need to write business checks, and my expenses are minimal. As long as I have an present my assumed business name certificate and ID, there's no reason for a bank not to deposit into my personal account.

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This has nothing to do with the question at all! –  littleadv Sep 19 at 4:12

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