Last Updated on Mar 6, 2020 by James W
A Business Savings Account Will Enhance Your Company’s Image and Cash Reserves
If you are the leader of a business you should be interested in a business savings account with free business banking products. There are several advantages to having a business savings account and they range from higher interest rate advantages to helping enhance the professional reputation of your business.
A business savings account represents a cash excess account that ensures that a business can meet its responsibilities no matter what the situation. Unfortunately there may be the occasion where your company experiences a financial shortfall and needs to access money quickly. A business savings account is where a company will store cash instead of investing it in other endeavours just to make sure the business is never left without the means to pay for its normal business needs.
Most businesses are reluctant to have large cash reserves in the bank because this money does not earn as much as it would when its invested in other aspects of a business with free business banking products. As such, to help motivate businesses to open business savings accounts the banks have provided several benefits to help attract and persuade business owners to invest in these type of accounts.
One measure that banks have used to entice companies to open business savings accounts is they have made the interest rates of these accounts higher than those of a private savings or chequing account. Thus, if a company is willing to open a business savings account their cash reserves will be receiving a higher interest rate which means they are increasing their actual monetary reserves. For a business owner the fact that the money they have in the bank is increasing just by its mere presence in the bank is always a good thing.
Another advantage of having a business savings account is that a company will enjoy the benefit of having less expensive transactions. Banks compete with other banks for clients and as such each will offer greater incentives to attract clients. A superior business banking savings account will offer anywhere between 30 to over 90 free transactions and will provide free registration for a business savings account. In contrast, if a small or medium sized business were to use a personal account for its business transactions they would quickly find themselves after between five and fifteen free transactions being charged a service fee for each additional transaction. A reliance on a personal checking or saving savings account for business matters could easily result in onerous amount of service charges at the end of a month which could be avoided with the use of a business savings account.
Almost every business owner dreads income tax time because they have to calculate all the monthly expenses which takes time from making sales and conducting income generating business. The use of a business savings account makes it much easier for a business owner to separate their business and personal transactions. By having the separate business savings account and using the business debit card and business credit card for purchases the company does not have to devote a large amount of time to distinguishing what is a business expense and what is a personal expense.
If you are the leader of a small or medium sized business one of the greatest challenges your company will encounter is demonstrating business legitimacy. Many potential clients and business partners will question whether your company has the ability and support to perform large tasks or complete complex projects. In a large number of situations a company’s every act will be scrutinized by a potential client or partner.
A business owner that writes a personal cheque to deal with a business cost whether it be the purchasing of material or using a personal credit card to pay for a meal will be sending a message to a potential client that they do not have a bank that is willing to associate itself with their business. A business savings account enhances the reputation and trustworthiness of a company because it expedites the acquisition of business products such as a business credit card and business cheques.
When a small or medium business owner pays for a meal with their business credit card or buys materials with a business cheque it assures a potential client or customer that their company is legitimate and has the support of a financial institution. This image of financial support to a small or medium sized business by a bank is significant because the memories of the recession that beset the world economy is still very fresh in the minds of people and a business that has banking support will be considered by other business people as one that has achieved a measure of financial stability and success.
A business savings account is an essential business product for a small or medium sized business. It is not only a place where a business can store and increase its cash reserves for emergency situations but it also helps enhance a company’s image to potential clients and business partners in that it represents that the business has a genuine financial relationship with a bank that respects its past accomplishments and its business plan for the future.
written by: Letroy2013