5 Benefits of Opening a Business Savings Account

A business savings account could provide your company with a number of benefits.

1. Can help you achieve business goals

Whether the goal is small (purchase a ping pong table for the staff break room) or large (expand the business through a new product line), having the cash available is preferable to taking out a loan. Through a business savings account, you have a built-in way to save money for the things that your business needs.

2. Access to the funds when you need them

While some types of investments are known for high returns, not all of them allow easy access to the invested funds. Often, the money must be left in its environment for a set time period and is otherwise subject to steep fees. Investments could be a part of the business portfolio, but a highly liquid savings option is essential.

3. Protection from loss

Typically for investments, the greater the return, the greater the risk. A business savings account can often offer competitive returns, but the biggest benefit is the FDIC protection if the bank or economy suffers greatly. Because the funds are being held in a bank, the funds are backed by the United States government. The same is not true for other types of investments, like mutual funds, stocks, or bonds.

4. Financial services held in one, convenient place

Chances are that at some point, the company will need some way to save money and make that money work for them. If they are invested in bonds or the stock market, then that is just one more website to visit or report to read. If the funds are in a business savings account, the funds can be on the same statement as the checking account, making it eaiser to keep track of everything in one place and monitor progress.

5. Why not?

Saving funds for a business is always a good idea. A reserve of funds makes the company less sensitive to economic downturns or industry issues. While fees are involved in the account, most institutions will offer reduced fees and increased benefits for bundling services or maintaining a certain balance. The benefits of a cash pool plus relatively unrestricted access to it certainly outweigh the costs.

If you would like to learn more about a business savings account in the Houston area, click here.

How to Have a Great Relationship With Your Commercial Banker

Commercial banking can be complicated. While it isn't necessary to be best friends with your banker, it could be beneficial to at least have a good working relationship, so they can help you understand the many delicate details involved in banking. As with any professional relationships, it is important to have respect for the professional knowledge of a colleague or vendor. More often than not, they can help you navigate the many pitfalls of business through their experience and industry know-how.

Simply scheduling quarterly meetings with your banker for a review and projection session could be all it takes to help. Some of those meetings could also include a tour of your facility to see your production levels, equipment, and meet your staff. Referrals is one of the best reasons to get to know each other. They have industry experience and could provide access to vendors and connections that could help you grow. In return, you probably have colleagues that could use commercial banking services they can trust. As you grow, you will likely need more services. That means that as you do more business with the bank, some fees could be bundled, making banking less expensive and more convenient. The banker knows you, what you need, and when an opportunity or issue arises.

The main ingredient to any relationship is trust. There is no exception for commercial banking. By getting to know each other and working together often, trust can be built on both sides. That means that when you are ready to ask about loans, they know the quality of business and the level of integrity you have. They will be more apt to help because they trust you and already know your financial history, with much of your information already on file. Likewise, you can trust them to suggest services that could help your company. Without that trust, you may think added products will simply be an unnecessary financial drain and could miss the benefits they offer. Through a trusting relationship, the banking experience has more benefits and less hastle.

If you would like to learn more about commercial banking in Dallas, visit Green Bank.

Do I Need a Business Checking Account If I'm Self Employeed?

If you are self employed, you may think that simply using your personal banking account is sufficient for all of your needs, but getting a business checking account could help. Even though you work for yourself, you are still running a business. In order to help keep budget and tax information separate and clear, it is helpful to have the cash flow in and out tracked through an account different than your personal accounts. While a business account may include different fees, it is also structured with tools that could help your business. 

 

If you have a hobby or startup business and it looses more than it brings in, you might be under the impression that it is easier to simply use your personal accounts to handle the financial transactions. However, by taking advantage of a business checking account, you help make the business more credible. Customers and banks can take the company more seriously if they make a payment to a business name, rather than your name. That could be the nudge your young company needs to make it viable. It can also help separate the losses of the business from affecting your household cash needs.

Especially for those businesses that are structured as a corporation, partnership, or LLC, it is important to be very careful about keeping personal and business transactions labeled correctly through a business checking account. If charges and income are confused between the two, there could be unfavorable legal repercussions. Both entities could be sued for liabilities. While you may think it easy to simply remember which transaction belongs to which entity, the hectic pace of life could easily cause a mistake. You may accidentally attribute a trip to an office supply store to the business, when it was actually for your children's school supplies.

Companies that are sole proprietorships are the least affected by using a two-for-one approach to banking. However, having separate accounts will make it easier to keep the books when the business is handled in its own accounts. Otherwise, you end up with situations such as worrying if the mortgage payment will bounce because a large business expense had to be made. It is important to speak with your accountant and banker to ask the important questions about your particular situation to make sure a business checking account is good for you.

If you would like to learn more about a business checking account in the Huston area, visit Green Bank.