Many business gurus and professional accountants highly recommend multiple business bank accounts because they keep your business organised. Segregating your expenses into multiple accounts will improve organisation, accounting, and protection from liability. For instance, it’s confusing to track your income and expenses with just one business account; with two, you can get separate, clear-cut financial reports quickly.
Here are more reasons why you should consider having multiple business bank accounts.
Organisation
Good organisation is the key to a successful business. Your multiple business accounts help you segregate payments for taxes, liquidity to invest in future ventures, and one for income and business spending.
By doing this, your accountants easily identify your financial situation at any time. Furthermore, you can take advantage of savings accounts perks you might have. For example, an expense account could have a lower minimum balance, while a high-interest savings account can have a higher minimum balance for your future years-long projects.
Everything Accounted for
Banks love a clean and organised sheet with multiple bank accounts indicating a clear set of relevant income and expenditure data. Managing your finances correctly encourages banks to consider your company for future financing because of your effort to minimise risk.
Lenders consider businesses for a checking or savings account in the future based on their track record. If your accountants have an accurate picture of your finances all the time, you can get financing during emergencies or on investments that your business greatly benefits from.
Possess Financial Security
Multiple bank accounts give each account security thanks to the insurance policies protecting it. Furthermore, if your bank’s digital infrastructure suffers from hacking or internal sabotage, your funds in other banks will stay protected.
Business scams and fraud activities have risen in the years from 2020’s challenging financial and business year. Fortunately, banks have learned to step up and introduce exceptional security measures. For example, ANEXT Bank’s three-factor authorisation is an enhanced security capability from two-factor authentication.
Have Cash Separation
Cash separation in multiple bank accounts lets you gauge your daily expenditure without requiring the accurate balancing by your accountant.
The cash flow you see in multiple accounts is easy to understand with cash separation. For instance, separate expense accounts for investing, maintenance, equipment upgrades and employee payroll make accounting faster and more accurate.
With cash separation, you can see the seasonality in the various expense categories.
Dependable Emergency Fund
Businesses can prepare themselves for any contingencies with multiple bank accounts. For example, if your equipment fails, you can use your savings account to finance a new machine, avoiding costly contract breaches by restoring your logistics schedule.
Many trusted businesses have a solidified logistics structure. A company achieves the trust of customers and other businesses with consistent performance. An emergency fund account lets you prepare for any rainy day, especially in business where uncertainty is part of the challenge.
Get Clear Liability
Separating your personal and business expenses is a must. Business loan payment periods can stretch to long repayment periods. With a dedicated business loan repayment account, you can monitor the business’ regular deposits to pay back the loan, meaning your accountants won’t have to go through long activity reports to track them.
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Organised Payroll
Expenses, income, profit, and payroll are four important business accounts you should have. Payroll contains the cash for your employee’s compensation and reflects any income adjustments for promotions and other incentives at your company. That said, you can imagine how combining payroll with other accounts would make your finances chaotic and disorganised. Your accountants will have to go through hundreds of activity reports and figures before they can create a report.
ANEXT Bank offers a daily interest rate to grow your balances and seamless bank account opening for businesses. You can open an ANEXT Business Account for free with no account opening charges and there are no annual fees and fall-below fees. Open as many accounts as you need to keep your finances organised.
