If you own a business, having a business bank account can be highly beneficial to your company’s growth. A business bank account might seem like extra work initially, but as you continue to use it for your business finances, you will master its advantages. A business bank account enables you to manage your personal and business finances separately, eliminating the chances of confusion in the later stages of the company.
If you have an active small business, you should have a small business bank account to help you maintain a professional and credible image in the market. This account creates an opportunity to earn the trust of customers and investors. Reading this article to completion will help you gain more knowledge about opening a business bank account, the importance of a business bank account, and the advantages of a business bank account. Utilizing information from this article, paired with your thorough personal studies will help you choose the best business bank account for your needs.
What is a business bank account?
A business bank account is an account that manages all the transactions and financial exchanges of a business. A business bank account provides various amenities to companies and offers unique solutions needed to operate a business successfully.
A business bank account offers several features, such as higher transaction limits and customer-specific support services. It also comes with various perks including credit card acceptance, business loan facilities, and the power to carry out tons of transactions
Business bank accounts also facilitate businesses with additional tools that help with electronic fund transfers, cash flow management, and online banking. A business bank account helps companies build a professional image in the market, thus increasing the chances of future partnerships and collaborations. It also allows companies to strengthen their relationships with financial institutions that can help them with funds in times of need.
Why is it important to have a separate business bank account?
A separate business bank account plays a vital role in managing finances smoothly. A separate account for your business prevents confusion between the personal and business funds.
This account can also save personal funds to use in times of legal claims and charges. A distinct disparity between private capital and business capital is necessary for accurate recordkeeping and preparing for audits to file taxes easily.
Moreover, specific business structures are required to open a separate bank account. Businesses that carry out their operations as a separate legal entity from their proprietors would recognize a business bank account as a practical solution.
An Employee Identification Number (EIN) is required to open a business bank account. This number is assigned by the Internal Revenue Service (IRS). If your business functions as a Limited Liability Company (LLC), a corporation, or a Limited Liability Partnership (LLP), it must have a separate business bank account.
Benefits of Having a Business Bank Account
Possessing a business bank account offers numerous benefits to businesses as they can manage their finances more efficiently and smoothly. The top 5 advantages of having a business bank account are provided below in detail.
Advantage 1: Separate your Personal and Business Finances
One of the primary advantages of having a business bank account is that you can separate the personal finances from the business ones. It provides you with more stability and accuracy in the business and allows you to focus on the growth of the company.
Separating business finances from personal finances gives you ample time to strategize your moves in the industry. A separate business bank account helps you manage the funds efficiently and improves control over the finances for the company..
Furthermore, separating business finances from personal finances helps you determine the expenses and maintain records for the business. Separate business accounts allow for a clear image of the finances when you file taxes, and provide distinct proof of funds for any authorities that may get involved. It also helps to create a professional business image and gain the trust of the customers and investors.
Advantage 2: Track Your Business Expenses More Easily
Another great advantage of having a business bank account is you can track your business expenses with ease. It becomes less complicated to monitor the business expenses and tax-deductible expenses, manage the cash flow of the company, and most importantly, it allows you to prepare precise financial reports.
If all the financial activities are routed through a single business bank account, it becomes easy to track and record the financial activities. This enhances the productivity of the business and reduces the possibility of errors in the records. This results in a better examination of the sales patterns and helps to identify the sectors where you can save money.
Furthermore, most banks provide online banking services that allow owners to track their finances anywhere, anytime. This facility will enable them to oversee the funds without needing to visit a physical bank. This saves their valuable time and helps them identify suspicious activities in the account.
Advantage 3: Establish Business Credit
Business credit plays a vital role in developing a business’s image. A business bank account is very helpful in establishing business credit. Business credit can be determined by analyzing the payment history of the account. Having a business bank account makes analyzing the transactions easy because the account will only contain the history of the business transactions.
Having a business bank account assists businesses with building a trusted and positive image in the eyes of customers and investors. For this reason, a dedicated business bank account is extremely helpful for separating personal credit history from business credit history.
If you have an established business credit in your business bank account, then it represents that you’re a legitimate business on the market and not someone unreliable or dishonest. A business bank account helps to manage the business finances separately, which helps in establishing good business credit.
Advantage 4: Protect Your Assets
Business bank accounts are extremely handy for protecting personal assets. In cases of legal disputes, having separate personal and business bank accounts helps in safeguarding the assets as there are fewer chances of authorities assessing the individual assets.
Business structures such as a Limited Liability Company or a Corporation are required to have a business bank account. Separating business and personal bank accounts can help protect personal assets from legal claims. Essentially, combining personal and business finances leaves your assets open to legal claims debts.
Business bank accounts are valid proof that the business is operating properly and is not involved in any unlawful activity. A business bank account is a form of credibility that persuades the authorities to believe in you. These individual accounts protect personal assets from being involved in activities concerning the authorities.
Advantage 5: Access Business Banking Services and Features
A business bank account offers numerous banking courtesies for its owners. Having a business bank account means you can enjoy various banking services. Business bank accounts offer access to several banking facilities that can help the business thrive in the competitive market.
A business bank account provides access to business loans, lines of credit, and other services required to improve the business. It also includes access to merchant services that permit companies to accept credit card payments, electronic payments, online transactions, and their financial activities.
Another facility that these accounts offer is access to cash flow management tools. If you have a business bank account, then cash flow management can be made easy using these tools saving you time and money instead of wasting it on an accountant. Lastly, having a business bank account means you have access to specialized customer support services.
How to choose the right business bank account for your business?
When you open a business bank account, you must consider several prominent details before choosing a fund. Being mindful of these details will help you choose the best business bank account. Firstly, the account you select should not have hidden charges. You should also find out what its fees and requirements are.
You must check the maintenance fees, deposit fees, ATM fees, and transaction fees of different accounts and compare them to choose the best bank account for your business. As many banks offer introductory incentives to attract customers, you should also check to see if they offer promotional incentives when opening an account.
If you’re confused about opening a business bank account, you can get help from expert financial companies Cheqly and IncParadise. They’re masterful in this industry and can provide the best possible facilities. They can help you open a business bank account online from the comfort of your laptop or phone. If you want to choose the best business bank account for your company and grow rapidly, then you must trust the services of Cheqly and IncParadise.
Planning to open a business account?
If your business is a Limited Liability Company (LLC) or a corporation, having a business bank account is a must. A business bank account offers multiple advantages to businesses and enables them to grow in the industry. To open a business bank account, you should be prepared to present the proper documentation.
If you want to open a business account online, you cannot find better companions than Cheqly and IncParadise. IncParadise and Cheqly are two companies that have partnered together in a way that makes opening a business bank account online and remotely easy. They can help you open a business bank account online from the convenience of any place. The partnership of both companies has helped thousands of businesses to excel and thrive in the market. Trust them to get the results you want from a business bank account.