Keep everyone's funds separate. Keep your paperwork to a minimum.
Many businesses hold money in escrow for clients or tenants. When that's the case, it's imperative that everyone's funds remain segregated. The problem is that multiple bank accounts can mean more paperwork and administrative costs for you. Berkshire Bank offers the efficient option of opening a single, interest-bearing escrow account with sub-accounts for each client's funds.
- The main corporate checking account is used to disburse funds.
- All funds reimbursed to clients/tenants are taken from their sub-account and a check is drawn for the exact amount. As a result, the balance in the corporate checking account will always be zero.
- All information on the main operating account and all detailed information on the various client/tenant sub-accounts is sent monthly.
- The year-end interest figure for each individual client/tenant is calculated by the bank.
- A completed IRS Form 1099 is mailed directly to the client/tenant.