Many times small business owners don’t see the need to have a business account.
Why do I need one? I can operate without one for sure.
There’s so much in having a bank account for your business. Truth be told, very many people lack financial discipline.
Financial discipline is the ability to rationally and logically manage yourself around money.
Many lack this attribute that’s key when it comes to managing business which is also largely about managing money.
A bank account enables you to have money away from yourself. It puts a reasonable distance between you and the business’s money giving you a chance to think rationally without money in your hands.
It also helps build a clear line between personal and business money. You will spend business money well knowing you are doing so.
Many small businesses also struggle to keep records and your bank is the first line of record keeping you can have free of charge.
It allows you to know money that’s coming in and money that’s going out and from this point you can start probing where it’s coming from and where it’s going.
You can also see the trends in regards to how it’s coming in and how it’s going out. Is it coming in in bigger amounts or is it going out fast.
All this can be achieved with a bank statement. It’s a great starting point for record keeping.
A bank account also helps you build some kind of credit worthiness that enables you get money when your business needs it.
At any point your going to need money as a business and your going to have to prove your ability to pay by approving your ability to earn and your bank statement will be your best bet to prove this.
If you don’t have a registered business have a separate personal account dedicated to the business although having one in your business’s name would have been the better option.
Jaluum Herberts Luwizza is a Speaker,Writer and Business Columnist with the Nile Post.He is also a Business Consultant at YOUNG TREP East Africa’s No.1 Business Management and Consultancy firm that helps people start and grow profitable businesses and YTS Associates Certified Public Accountants.