5 Uses for Your Bank Account Routing and Account Numbers

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Your bank account routing and account numbers might not seem very significant, but they act as an important gateway for the cash going into and out of your bank account. Freelancers and other small business owners may find keeping your routing and account numbers handy is a good idea, as you’ll need them somewhat frequently when looking to move funds in or out of your account online or when working with business partners.

Client Payments

The best use for your account and routing numbers is getting paid! The ultimate reason you work, after all, is to make money. An electronic funds transfer is typically the cheapest and easiest way to get paid by any client. If you work online, this payment method is the standard way to get cash into your bank account. And that remains the case when you use an external payment or invoice processor like Due.com.

Some larger clients prefer to pay me via a direct funds transfer. For others, I use a payment process connected to my website or online invoicing system. In all cases, the cost is quite reasonable and the payment processor ensures the funds show up in my account quickly and on schedule. What more can you ask for?

Payroll

For tax reasons, I found it is better to run my business as an S-Corporation and pay myself a regular paycheck for the work I do at my company. It doesn’t matter if you need to just pay one person or a whole slew of employees, you may need your bank routing and account numbers for payroll. This makes sense for a lot of reasons. Here’s how I have my payroll set up:

1. Automatic recurring payroll (salary) with a fixed amount every Friday
2. Payroll service automatically withdraws payment from business checking using routing and account numbers from the business account
3. Payroll service automatically deposits payment into my personal checking using routing and account numbers from my personal account
4. Lastly, payroll service deducts state and federal taxes using routing and account numbers from the business account and automatically sends them to government tax authorities

That’s it! It works easily and simply. After a relatively quick setup process, I had this up and running and don’t have to touch a thing to keep my regular paychecks showing up in my personal account. Aside from getting paid first in the business account, that is.

ACH Transfers

If you want to transfer money between business accounts or business and personal accounts at different banks, you’ll need to tap into the same electronic fund transfer system used for payments and payroll as described above: the ACH system. ACH is short for the automated clearing house, a system from the Federal Reserve Bank that allows banks to send money to accounts at other banks using just routing and account numbers. Pretty slick, right?