If you are running a business, you should have a business account for seamless tracking of cash outgo and inflow. A must-have for Indian startup founders, having a business account is a safe way to ensure that there are no erroneous transactions taking place.
Read on to know why opening a business account is important, how it works and more.
A business account is a bank account for people who own and run business. It is a current account opened by business owners and proprietors to monitor the flow of money in their business systematically. There are several types of business bank accounts. They depend on which kind of business you own.
Through a business account, a business owner can monitor cash balances, pay their employees, and keep an eye on the amount of money owed to the business and other creditors. A business cannot function even for a day without a proper business account.
A business bank account is for people who have or want to have a small business. Start-ups are mandatory to open a business account. This is necessary to ask for monetary help from financial institutions.
Let us take a look at who can open a business account.
There are many reasons why you need a business account. A business account would be a starting point in managing your business correctly if you are a new business owner. Let us look at some other reasons for opening a business account.
A business bank account works similar to that of your savings account. The only difference would be you could open a business bank account only for business transactions. Just like a normal bank account, you can use your business account to pay employee salaries, bills, purchase raw materials, etc. Here are some of the features of a business banking account:
Business accounts have a variety of advantages for businesses. Here are a few of them:
Following are the different types of business accounts:
Follow the steps given below to know how to open a business account:
Following are the documents required to open a business account:
It would help if you remember the following things when opening a new business account:
A business account aids a business owner in maintaining smooth commercial operations. The facilities vary based on the type of business account you choose and the financial institution you have opted for to open an account.
Ans: The best time to open a business account for any business owner would be before receiving payments. It is recommended to have a business account before dealing with receivables and expenses to have a secure avenue for all the finances.
Ans: You can opt for a merchant account regardless of the nature of your business. A merchant account is equally suitable for an import-export business as for any other commerce type.
Ans: A business can decide upon having or not having a payroll account as per their requirement. It is not a mandatory obligation to have a payroll account for distributing salaries to employees. The task can also be done through a regular business checking account.
This article is solely for educational purposes. Navi doesn't take any responsibility for the information or claims made in the blog.
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