Do you want to open a business bank account and if you considering if it is worth it.
Starting and running a business in Nigeria can be challenging, especially if you’re willing to do it alone.
With the right tools and support, however, your business can face whatever stands in the way of achieving your dreams. Something essential that no business can skip out on is a business bank account.
Table of Contents
What Is A Business Bank Account?
Business bank accounts are simply bank accounts dedicated to your business. For the business owner who wonders about the importance of business bank accounts, we’ll be showing five amazing advantages and why you should open one today!
5 Main Benefits Of A Business Bank Account
- Separation of personal and business finance
- Improve credibility and prefessionalism
- Access to loans
- Record-keeping and tracking of business transactions
- Protection of your business
Now that we know what a business bank account is, let’s look at some of the advantages of business account for small businesses.
- Separation of personal and business finances – One of the most essential advantages of having a business bank account is the ability to separate personal and business finances. Keeping your personal and business transactions separate makes it easier to manage your finances and provides a clear picture of the financial health of your business. This also makes preparing financial statements and taxes easier, as all of your business transactions will be in one place.
- Improved credibility and professionalism – Having a business bank account can also improve the credibility and professionalism of your business. It shows that your business is serious and organised and that you take your financial obligations seriously. This can be especially important when dealing with clients, vendors, and other business partners, who are more likely to do business with a financially stable and well-organized company.
- Access to loans – Another great advantage is the ability to access short and long business credit designed specifically for small businesses. With easy access to loans when needed, you can keep your business moving when your finances are running low. These services are especially essential to small businesses where being able to raise working capital might be all they need to grow and succeed.
- Record-keeping and tracking of business transactions – Having a separate business bank account makes it easier to keep track business transactions. This is important for record-keeping purposes and tracking your business’s financial performance. With a bank account for your business, you can easily monitor your expenses, cash flow, and other financial metrics, which can be useful when making decisions about the future of your business.
- Protection for your business – Finally, a business bank account protects everything important to your business. Whether it’s insurance for your health and the health of employees or insurance for your business assets, having a business bank account is your last line of defence against losing all you’ve built as a business owner.
3 Disadvantages of Not Having A Business Account You Should Know
Here are some main disadvantages of not having a separate business bank account.
- Legal Issues: It’s illegal to operate your business without an dedicated bank account – and it can be costly. Without one, you’ll have difficulty defending the legitimacy of your enterprise and could face serious fines. It’s important that entrepreneurs open separate business banking accounts as soon as they launch their operations.
- Record-Keeping Challenges: A distinct business bank account is an essential component of managing, recording, and organizing your finances. Without one, you run the risk of perplexity, oversight, and mistakes as personal expenses become intertwined with company ones. By having a separate financial platform for running all business transactions on, it also becomes much simpler to distinguish between income and expenditure within your enterprise.
- Line of Credit Challenges: From securing loans to accessing the funds necessary for growth, a separate business bank account is essential in building an effective credit history and furthering your enterprise. Unfortunately, without one, you may find it difficult to establish good business credit or gain access to lines of credit that could help improve and expand your operations.
What Features Should You look When Opening A Business Account?
With the several advantages we’ve highlighted about deciding to get a business bank account instead of your personal bank account, if you are interested in opening a business bank account, it’s important to look deeper into the features one should offer.
Finding a business bank account that offers all the following features guarantees that managing your business will be easy and can be done from one place:
- Online and Mobile Banking: In today’s fast-paced world, having access to online and mobile banking is a must. This feature allows business owners to manage their accounts on the go, making it easier to keep track of financial transactions and stay on top of their business finances.
- Bookkeeping: A business account with bookkeeping features makes it easier to manage financial transactions and track expenses. Accounting is an essential part of assessing the performance of your business. In the early days of starting a business, having bookkeeping features saves you the money you need to hire an accountant, protects you from fraud and ensures you stay compliant with financial regulations.
- Overdraft: Overdrafts are short-term loans that offer your business a line of credit to keep it going when you’re running low on funds needed to run your day-to-day activities. Overdrafts provide businesses a safety net, ensuring they have enough funds to cover their expenses, even in times of financial difficulty.
- Expense Cards: Expense cards are dedicated to specific purchases your business needs. With the exact funds for your business needs loaded onto expense cards, it makes it easy for you to keep track of your expenses and makes it very difficult for you to be a victim of fraud. Ultimately, an expense card is your solution to managing their expenses, limiting their liability, and protecting your business from fraud.
- Payment collection solutions: Every business needs a way to accept customer payments, and a great business bank has a solution for that need. In Nigeria, a great payment collection solution is a POS terminal. These allow your customers to make payments easily using a card or transfer and make bookkeeping by tracking each transaction made with printed receipts.
- Customer Service: A business account with high-quality customer service is crucial for ensuring that businesses receive the support they need when they need it. Good customer service ensures that businesses can quickly resolve any issues that arise and get the answers they need to manage their finances effectively.
How Can You Maximize The Benefits of Your Business Banking Account
We’ve seen how your business bank account can be beneficial. Your next question would be how to ensure your business can maximize these benefits to stand out and stay ahead of your competitors. Here’s how:
- Choose the Right Bank – The first step in maximizing the benefits of business banking is to choose the right bank. Consider your business needs, such as the size of your business, the type of transactions you will be making, and the number of employees using the account. Also, consider the fees, interest rates, and services each bank offers. Research and compare different banks to find the best fit for your business.
- Utilize Online Banking – Online banking is one of the most convenient benefits of having a business bank account. Online banking lets you access your account anytime, anywhere, and manage your finances from your computer or mobile device. With online banking, you can control your business from anywhere without being restrained to sitting in an office chair all day.
- Utilize business Loan Options – Many banks offer loans specifically designed for businesses. Business loans can provide the funds you need to grow and expand your business. Ensure you take advantage of your loans to stay afloat and take your business to the next level each time.
In conclusion, having a business bank account over a personal account has many advantages. From managing your finances to getting that loan you need to power your business, a business bank account is your all-in-one solution to starting, growing and expanding your business in Nigeria. As a business owner searching for these benefits, you need a bank account that make it easier to track record of making your business dreams a reality.
If you need a business bank account, then check out Moniepoint. With over 500,000 businesses (and counting) powered by Moniepoint, it’s no wonder why more and more business owners like yourself choose to bank with us. You should too.
Make the right choice for your business. Click here to open a Moniepoint bank account for your business and enjoy the countless benefits you need to succeed.