The idea of starting up a business starts as a dream and turns into a reality after going through various decisions. Solving challenges and taking critical steps are part and parcel of the startups to climb the stairs to success. One of the initial decisions for your business finances includes opening a business bank account.
Your innovative startup idea deserves to have a suitable business account to meet your business’s financial requirements. Financial institutions today understand business needs and provide tailored solutions with specialized banking accounts.
This article guides you more in the direction of the business bank account and current account, their meaning, and the opening process.
Opening A Business Bank Account
As a startup, the entrepreneur has ample things in mind and various actions to take. In these big essential tasks opening a business account may seem a small unimportant thing. However, in reality, it is as important as any other major task.
Read on to know what this business account is and why it is important.
What is a business account?
A business has various parties involved such as vendors, customers, investors, employees, etc. In order to take care of the business relations, you need to process various financial transactions and they vary as per the business type. Also, you need a business account for the same. In addition, it is also important for the best customer experience and business branding.
The banks and financial entities provide business bank accounts to meet their business-specific requirements for processing their finances. Thus, the financial institutions would offer the features and resources with the account that are suitable for the startup’s needs and growth.
Apart from the basic banking services such as capital deposits, collections, payouts, expenses, and bill payments, a current account is essential for businesses for various other reasons. Such other functions include business-related management such as accounting, taxes, payroll, invoicing, etc.
After going through their offerings as per your startup requirements, you must choose the account and its provider. For example, international transactional facilities, account balances, and more.
The simple process to open
A savings account requires basic personal identity documents. However, for business accounts, it would vary based on the type & location of the business, and bank-specific requirements.
The process involves the submission of such documents including business registration and incorporation, Business PAN, IT return, Utility Bills, ID proof, etc. Based on the business type, the entity docs requirements include trade license, shop establishment license, partnership deed, company address, PAN, power of attorney docs, etc.
Thus, to open a current account, you need to register your business, acquire the licenses based on your startup, and complete other new business processes.
Next, choose the right bank or financial institute and apply online/offline for the account. Further, submit the required documents and wait for the verification to complete.
Post successful verification, your chosen institute will open your account.
Reasons to open a Current Account for your business
As a startup, SME, or small business owner, you might wonder, why do I need a Current Account? You may have one personal or savings account, that you have been using already or you are just confused about choosing the type of account you should open for your business transactions.
Let us first know, what is the difference between a savings account and the so-called business bank account i.e. current account.
Savings VS Current Account
Now, when you are a salaried person or when you are receiving an income at a fixed duration, a savings account is the most suitable. Basically, it is supposed to be used for your savings and you can earn the interest on the same.
On the other hand, the current account is supposed to be used for frequently occurring transactions on a daily basis and thus is best suitable for businesses. There is no interest earning on this type of account. The emphasis here is that they are made specifically for business banking needs.
This article helps you understand why use a current account for your business.
Benefits of employing a current account
A business requires processing numerous transactions, possibly of significant amount. This requires you to have a special type of account because a savings account has its limitations on the number of transactions that you can carry out. A current account enables withdrawals, deposits, and more.
Read more to understand its importance for businesses.
Separate business from personal
A current account will be beneficial to keep your business dealings separate from your personal ones. You will know each and every transaction relating to your business in terms of income, expenses, account receivables & payables, bill payments, and more. The tracking and management of cash flow become seamless. Also, your taxes and other compliances would be hassle-free.
This further helps with the accounting and bookkeeping for your business on top of business data and reports.
Helps with effectiveness and branding
As discussed in the previous point, it will help with the separation of the business transactions and thus signifies the same. For the growth of small businesses and startups, business branding is highly important. Having a current account will boost the trust of your client, customers, vendors, and other parties. A bank account in a business name surely does that.
Also, it helps ease out the day-to-day transactions and makes them speedy and efficient, further adding to the brand image.
No transaction limit
Limiting the number of transactions and capping the amount would be a hindrance to your business flow. The current account is made for businesses and thus you need not worry about how many transactions you can carry out. It enables day-to-day transaction processing with a very high amount limit and frequency.
Facilities suitable for businesses
The current account includes overdraft facilities to meet expenses such as bill payments, salary payments, account payables, etc. Overdraft means they allow the disbursement of an amount more than your account balance with a set upper limit. Also, it facilitates bulk payouts, international transactions, demand drafts with zero charges, and various payment methods such as NEFT, RTGS & IMPS, and other facilities.
You may check with your current account provider for the different services and facilities that they offer.
Business Bank Account VS Current Account
In simple terms, a business bank account is like a special type of bank account exclusively designed for businesses. Its primary purpose is to keep a business’s finances separate from personal finances, making it easier to manage and track business transactions and expenses. Business bank accounts often come with additional features tailored to meet the specific needs of businesses, such as tools for invoicing, accepting payments, and accessing business loans.
On the other hand, a current account is a more general term that comprises both personal and business accounts. Sometimes, when people mention a “current account,” they might be referring to a regular checking account used for everyday transactions. However, unlike a business bank account, a current account may lack the specialized features designed specifically for businesses.
All in all, a business bank account is like a dedicated financial hub for businesses, equipped with tools to facilitate business operations. Meanwhile, a current account is a broader term that includes various types of accounts, both personal and business, often used for day-to-day financial activities.
Accosis Banking with Everything
Overcoming the traditional banking drawbacks, Accosis Banking has brought a new-age banking experience with its banking products and features. We offer the best services around the same.
One of them is the online current account. It helps you track and manage cashflows, enables single and bulk payouts, reporting, instant beneficiaries, easy tax payments, a smart dashboard, and more. Accosis’s Current Account is built with complete security and compliance.
Combine PyThry banking with our other payment and accounting products for a complete business financial package.
To know more, contact us today!
Choosing Accosis for a Business Account
After being sure that you want to open a business account, you now need to ensure to choose the best lifelong banking partner for the same. Accosis offers the best business banking experience with its online current account for startups, SMEs, and other businesses. With the business bank account, our offerings also include payments, payouts, invoicing, and other products to complete the business suite.
Further, our connected banking facility enables the linking of multiple current accounts on one single platform. This way you can access and manage more than one bank account in real-time in a hassle-free manner along with auto-reconciliation.
Try our products and be in control of your business finances with Accosis. Grow and expand your startup with the best Accosis financial technology.
