Best Bank for Catering Businesses
The best bank for catering businesses handles event deposits, sales tax, and 1099 payouts. See why Novo fits caterers and what to know about cash deposits.
Catering has a cash flow shape unlike most small businesses. You take a deposit when a client books, often weeks or months before the event. You pay food, rental, and staffing costs in the days leading up. You collect the final balance on or after the event. Then sales tax and payroll come due on their own schedules. Your business banking solution must handle deposit billing, separate funds by event, and integrate with the software you already use.
This page covers the core banking features catering businesses require, the reasons Novo fits this workflow, and the tradeoff regarding cash deposits.
What do catering businesses need from a business bank account?
Catering is a deposit-driven business. A bank account without invoicing, ACH, and card-payment support can make deposit tracking and final-balance collection harder.
Accept large client deposits and final payments by card and ACH. Many caterers ask for a deposit at booking and the balance before or just after the event. Your account needs to accept both card and ACH cleanly, since corporate clients usually prefer ACH or wire and individual clients usually pay by card.
Send invoices with deposit schedules. A wedding booked nine months out might involve a booking deposit, a menu-confirmation payment, and a final balance. Your invoicing tool should let you bill those separately and track which have been paid.
Categorize expenses for food, rentals, staffing, and vehicles. Food cost, rental equipment, 1099 staff, fuel, and commissary fees all need to land in the right buckets for taxes and for figuring out your margin on each job.
Integrate with the tools you already run. Most caterers use some combination of a booking or POS tool, a payment processor, payroll, and accounting software. The account should connect to all of them without manual exports.
Handle tips, gratuities, and 1099 payouts. Event servers and bartenders are often 1099 contractors. Tip pools and contractor payouts need to leave a clean paper trail.
Have a plan for cash. Drop-off lunches, small private events, and farmers-market sampling sometimes mean cash on the day. Novo does not accept cash deposits, which is a real consideration for cash-heavy caterers.
Why does Novo work well for catering businesses?
Novo is a fintech offering small-business banking solutions built for invoicing, online payments, and software integrations.
No monthly fees, no minimum balance
Catering margins are thin once you back out food cost, labor, rentals, and tax. Novo charges no monthly fees and requires no minimum balance, so a slow February doesn't cost you account maintenance fees on top of fixed costs.
Unlimited invoicing with card and ACH
Novo Invoices let caterers bill event deposits and final payments and accept card or ACH. You can send a deposit invoice the day a client books, and a balance invoice a week before the event. The client pays online, and payments settle to your Novo account based on the payment method and processor timeline. Unlimited invoicing is included at no additional cost; standard card processing fees may apply on card-paid invoices.
Reserves for sales tax, payroll, and equipment
Novo Reserves let caterers set aside money for sales tax, payroll, and equipment per event. Reserves is a budgeting feature within your Novo checking account, not a separate account. When a $12,000 wedding deposit posts, you can allocate portions of the balance: a percentage to a sales-tax Reserve, a percentage to a payroll Reserve for the day-of staff, the rest to operating. By the time tax is due or you need to pay servers, the money is already earmarked. If you want to go further and split funds into multiple labeled buckets, see how business sub-accounts work for taxes and payroll.
Integrations with the software caterers use
Novo integrates with Stripe, Square, Shopify, QuickBooks, and Xero. If you take online orders through a Shopify storefront, process in-person card payments through Square, or run your books in QuickBooks, the connections are direct. Payments and expenses sync, so you spend less time on data entry.
No fees on incoming wires
Corporate clients, including law firms, hospitals, universities, and production companies, often pay by wire, especially on invoices over $10,000. Novo does not charge fees for incoming wires, which can help caterers receive large corporate event payments by wire. For a deeper look at timing, limits, and how to send outgoing wires, see our business wire transfer guide.
FDIC insurance through the partner bank
Deposits are insured for up to $250,000 through our partner bank, Middlesex Federal Savings, Member FDIC.
The tradeoff: no cash deposits
Novo does not accept cash deposits. If you regularly accept cash, keep a traditional bank or credit union account for cash deposits and transfer funds to Novo as needed. For caterers whose payments are mostly card, ACH, and wire, this isn't a blocker. For a caterer running a heavily cash operation, plan for the workaround before switching.
How do you choose a business bank as a caterer?
Evaluate these five factors before choosing a bank account.
Match the account to your payment mix
Look at your last three months of revenue. What share came in by card, ACH, wire, and cash? If cash is a small share of revenue, an online business checking account like Novo fits cleanly. If cash is a large share, you need either a traditional bank with branches or a workaround for cash deposits.
Compare invoicing features
If you bill deposits and final payments separately, which most caterers do, your account should send invoices natively, accept card and ACH, and show you which invoices are paid, unpaid, or overdue. If your invoicing needs are simple, using invoicing inside your bank account can help you avoid paying for a separate tool.
Check integrations with your stack
List the software you already pay for: booking tool, POS, payroll, accounting. Then check that the account connects to each one. If your bank requires you to export CSVs and import them into QuickBooks manually each week, that adds bookkeeping time.
Compare fees on wires, ACH, and card processing
Traditional business checking accounts may charge fees for outgoing wires, while ACH transfers are typically lower-cost or free at many institutions. Card processing fees vary by processor and transaction type. Add up what those fees would cost on a normal month and compare.
Confirm FDIC insurance
Any account holding your money should be FDIC-insured.
Many fintech small-business banking solutions partner with an FDIC-member bank to provide that coverage. Confirm it before you fund the account.
How do you open a business bank account for a catering company?
The application itself is short. Once approved, connect your software to integrate the account into your workflow.
Documents you'll need
- EIN (Employer Identification Number) from the IRS. Free to obtain online.
- Formation documents for your LLC or corporation (articles of organization or incorporation). Sole proprietors can typically apply with an SSN. If you operate as an LLC, see the full business checking for LLC setup guide.
- Government-issued ID for each owner with 25% or more.
- Business address and a basic description of what you do.
Apply online
Novo's online application can be completed in about 10 minutes. Approval timing depends on identity verification, business details, and any additional review needed.
Connect your stack after approval
Complete these setup steps after approval:
- Connect your payment processor (Stripe, Square, or Shopify) so client payments route to Novo.
- Connect QuickBooks or Xero so transactions sync automatically.
- Set up Reserves (a budgeting feature within your Novo checking account) for sales tax, payroll, and an equipment fund.
- Move your recurring vendor payments (commissary rent, insurance, software subscriptions) over.
A simple deposit-tracking template
Caterers often track event deposits in a spreadsheet alongside the bank account. Here's a starter template:
EVENT DEPOSIT TRACKER
Event name:
Event date:
Client name:
Total contract value: $
Deposit due (date / amount): $
Deposit received (date / method): $
Balance due (date / amount): $
Balance received (date / method): $
Sales tax owed: $
Sales tax moved to Reserve: $
Staff payouts (date / amount): $
Net margin: $Tip: paste that block into ChatGPT or Claude with a prompt like "Turn this into a Google Sheet with formulas for sales tax at your local rate, a 30% labor reserve, and a net margin column" and you'll get a working sheet you can import to Google Drive or save as Excel. The same prompt works for a fillable PDF if you'd rather hand it to a bookkeeper.
What questions do caterers ask about business banking?
Can I use a personal account for my catering business?
You can, but mixing personal and business funds can complicate bookkeeping and may affect the separation between you and your business entity. Separating business and personal finances can help preserve liability separation and make tax records easier to manage. Ask a legal or tax professional how this applies to your structure.
Does Novo accept cash deposits?
No. Novo does not accept cash deposits. Caterers who take cash regularly can keep a traditional bank or credit union account for cash deposits and transfer funds to Novo as needed. Caterers whose payments are mostly card, ACH, and wire generally don't need a workaround.
What fees should caterers watch for?
Watch outgoing wire fees, card processing rates, and overdraft policies on traditional accounts. Card processing through your processor varies by transaction type, and overdraft fees on legacy accounts can add up quickly. Novo charges no monthly fees and does not charge fees for incoming wires.
Can I accept event deposits through Novo Invoices?
Yes. Novo Invoices accept both card and ACH payments. You can send a deposit invoice the day a client books and a balance invoice before the event, and clients pay directly online.
How long does it take to open an account?
Novo's online application can be completed in about 10 minutes. Approval timing depends on identity verification and any additional review needed. Have your EIN and formation documents ready before you start.
Is my money safe?
Eligible deposits at Novo are insured for up to $250,000 through our partner bank, Middlesex Federal Savings, Member FDIC. FDIC insurance does not cover every type of financial loss.
Is Novo a good banking solution for caterers?
If your catering business runs on card, ACH, and wire payments, Novo fits the workflow: no monthly fees, invoicing with deposit billing, Reserves for sales tax and payroll, and direct integrations with Stripe, Square, Shopify, QuickBooks, and Xero. The one thing to know going in is the cash-deposit limitation. If you take cash regularly, plan for it before you switch.