So you’ve got yourself a business credit card, maybe a couple of them. And a DBA or articles of incorporation. And you’ve even got a business checking account. So it seems like you’re covered. Do you really need a business savings account? In almost all cases, the answer is yes. These accounts do more than just the obvious in terms of helping you set aside my knees that your company will need in the future. They also offer a range of other benefits, including:
Rainy day insurance.
You never know when an emergency is going to strike. Or for that matter, an opportunity. Whether it’s a leaky roof made worse by a spring storm or the sudden need to hire new contractors to help you cover a big piece of new business, having liquid cash on hand is going to come in handy indeed in those circumstances.
In some cases, the amount of cash on hand that your business can claim can improve your credit rating. Additionally, a commercial savings account with healthy balances demonstrate solid business practices and an overall picture of good health. These can be attractive assets to highlight when you’re applying for a loan or for some other type of credit-based consideration for your business.
Even the most well-prepared business owner will sometimes find that he or she comes up short when it is time to pay taxes. Some extra cash socked away for a tax rainy day can cushion the blow that comes from these unpleasant surprises.
If you are trying to impress or score points with a potential investor, potential partner, or an advisory board of directors, dedicated savings can help you present a general picture of stability.
A dedicated business account – in other words, an account that is kept separate from your personal account – makes for a more pristine bookkeeping. This can really come in handy should you have to go through an audit of any kind, IRS or otherwise.
Savings accounts build discipline.
There is just something about bare existence of a savings line that makes you feel compelled to establish a healthy balance and watch it grow from month to month. That’s probably because most of us don’t like to receive monthly statements that show a lackluster balance and no growth. The desire to grow your own savings account balance can make you think twice, many times for the better, about expenditures and expenses associated with your business.
Better relationships with your banking institution.
And in some cases, more rewards. Some banks may offer incentives that very much make it worth your while to have multiple accounts with that bank. Additionally, having this type of account demonstrates a commitment to sound business practices that likely won’t go unnoticed by your bank. Whenever you need your bank to look favorably upon your business, like when you’re applying for a loan, it certainly helps to have a relationship already in place.
Setting a good example.
Particularly in cases where a business owner may want to groom an employee to take on more responsibilities one day, or even take over the business, solid and well-advised business practices like having a business savings account can go a long way towards setting a positive example for those employees.