Businesses of any size have at least one bank account. It's a crucial and core component of any enterprise as it allows payments to get sent and received. What's more, it's easier to track spending when you can refer to bank statements.
Many business leaders assume that having just one bank account is enough for their needs. If that is something you also believe, I'm here today to tell you that you are wrong! It makes more sense to have two or more business accounts, believe it or not! Here's why:
Better protection against bank problems
Have you ever heard the saying "you shouldn't keep your eggs in one basket"? Well, the same thing applies to business banking. Let's say that you only have one bank account. What would you do if your bank had a problem that meant you couldn't access your money? How would your business operate without any ready access to cash?
These days, the threat of cyber attacks on banks is growing per year. The Internet has spawned a generation of hackers intent on causing disruption to commerce. In particular, they feel that shock tactics will make large corporations listen to them.
If you had a second account but with another bank, the situation wouldn't be untenable. You'd still have access to funds, meaning you can cover expenses like invoices and wages.
You can keep tax money locked away
All businesses have to pay taxes at some stage. The tax they pay is often in various formats depending on the type of enterprise. If you keep all your money in one account, some of that cash will include tax money.
As you can appreciate, you could end up in dire financial straits if you spend that tax money on something else. And if you don't pay your tax bills on time, expect fines and even prosecution by the government!
A separate account for your tax bills means you can lock it away and never worry about it. When your bills are due for payment, you'll have the funds available. Managing a second bank account for tax payments also makes your bookkeeping easier.
You make and receive international payments
Some people reading this might assume that services like PayPal can handle international payments. While that's true, not everyone wants to use the payment platform. Instead, they would rather make or receive regular bank transfer payments.
What you might not know about your business bank account is it may not handle international payments. Even if it did, you could end up getting charged a lot of fees for currency conversions.
Let's say that your bank account is in US Dollars. Now, if you want to deal with European suppliers or customers, you'd have to make payments in Euros. Having a separate Euro account means your transactions cost less to make and maintain.
You want to watch your money grow
Does your business have some spare cash? If you leave it sitting in your regular bank account, it's likely you won't receive any interest on it. Instead, you could open a separate savings account. There are variations of them available, such as instant access ones.
Opening a savings account is usually quick and easy to do. Store any unused money in there and earn some interest on it!