27 Jul How Many Bank Accounts Does Your Business Need
Many business owners only have one bank account for their company. While this may suffice, it would be a prudent idea for an entrepreneur to have multiple accounts. With more than one account, a business owner can enjoy a few benefits. Of course, most people do not know how many they should have. In reality, it will be up to a business owner to determine their wants and needs. Here is a quick guide for an entrepreneur to decide how many accounts he or she needs.
Size: A small company with one or two employees does not need much in the way of financial products. On the other hand, a large corporation with multiple offices and dozens of employees will need to spread their money across a few financial institutions. This is especially true when the organization many has multiple credit card processing and merchant accounts.
Products: As mentioned, some companies have multiple merchant accounts. Others may only accept checks and cash. When the company engages in credit card processing, it would be wise to have a bank account to accept payments. This will make it easier on accountants who want to look at the numbers and determine, with ease, how profitable a product or service is to the business.
Access: Often, a company will need access their money without trouble. To do this, some companies opt to open up a bank account at three or four local branches. When doing so, the business owner and supervisors can go to the bank and make simple financial transactions with ease. Remember, a well-run company should have easy access to their funds should they need to make an investment or pay a contractor.
Amount: Now, some new companies do not have a lot of cash in the bank. When a person only keeps a minimal amount of cash in the bank, he or she can keep one or two accounts. On the other hand, a large and well established company with plenty of reserves should have multiple accounts. Remember, there are FDIC limits and one must stash money in multiple places to protect their money adequately.
Most business owners do not put much thought into this process. Luckily, when spending some time to think about the situation, one can have the best bank accounts for their business. Remember, there is not one size fits all solution for the banking needs of a company.