A business needs a proper system to manage its regular spending. So to manage its expenses, business accounts play an essential role. These accounts help track the cash balance, business money, creditors payment, and payroll paid to all employees. We all know that a business account is the backbone of a business and the report generally builds a relationship with the company and a bank. Therefore, we can refer to it as a more specialized account to take care of the changing financial requirements of a business.
Benefits Of Holding A Business Bank Account:
Some of the benefits of having a separate bank account to run a business successfully are as follows:
- It ensures an adequate amount of business funds so that it does not create any issues while making an important business decision.
- It looks professional and credible to have a business account with the customers and clients of a company.
- A business bank account offers several exceptional facilities, including multi-currency accounts, international fund transfers, USD to SGD currency conversion, lines of credit, and more.
Different Types Of Business Accounts:
- Merchant Account:
Businesses require a merchant account to accept credit card payments. Moreover, it allows a company to get all costs, making it convenient for all customers. Businesses with an online presence can easily set up accounts through a bank and a third-party processor. They need to get a few approvals such as credit score, business tenure, bankruptcy history, etc.
- Current Account:
A current account is one of the most widely used business accounts that allows companies to deposit or withdraw funds without hassles. Business owners can transfer their funds usually in two ways, either electronically or via cheque. Current account holders can always access the funds available on the account but rarely earn interest because of their liquid nature.
- Money Market Account:
The account is similar to a savings account, but there are a few more restrictions on free fund transfers than any other account. However, it requires a higher minimum deposit to maintain the account but offers a higher interest rate than a savings account.
- Savings Account:
Companies can accumulate their extra earnings in a business savings account and earn higher returns on their savings. Therefore, it ensures that the business has a financial backup if they face any crisis in the future. Nowadays, organizations can also keep their yearly tax amount in a savings account to earn some interest for a short period.
- Accounts Payables:
Accounts payable are a listing of accounts that include mortgages, lines of credit, and more. It is crucial to maintain accounts payable to run a business successfully as it performs certain critical functions of a company. Unfortunately, many organizations still operate with a manual accounts payable process that is very labor-intensive and time-consuming. Therefore, to solve this problem, businesses need to automate the accounts payable process to ensure that work gets done on time.
At present, many businesses around the world are now operating their business accounts. These non-traditional accounts are gaining popularity daily due to their globally competitive pricing structure. Moreover, in some countries like Singapore, businesses have a lot of flexibility and transparency to open or maintain a domestic or foreign currency business account.