Having a business involves dealing with money daily, paying suppliers, getting payments from customers, dealing with salaries, and monitoring costs. To make all this convenient, businesses use a current account. While a savings account is built for generating interest, a current account is meant for fast, smooth, and frequent transactions.
Let us explore how current accounts simplify business banking and make the process smoother.
What makes a current account different?
A current account is created for individuals and businesses who have to transfer money frequently. This is what makes it different:
- No End to Transactions: You can deposit or withdraw money whenever required.
- Facility of Overdraft: Banks allow you to withdraw more than the balance you hold up to a certain limit, aiding in cash flow deficits.
- No Fixed Account Types: Most banks these days provide a zero balance current account that doesn’t require you to establish a minimum balance.
- Easy Accessibility: Online banking, cheque books, and mobile apps make your account management easy and quick.
How current accounts support businesses
1. Simple Supplier and Vendor Payments
Businesses frequently need to make payments to several suppliers and vendors. With a current account, you can make these payments easily by cheque, online transfer, or demand drafts. This establishes trust with suppliers since payments are always on time.
2. Quicker Customer Receipts
Accepting payments from customers is now trouble-free. Online transfers, cheque deposits, or cash deposits – a current account can do it all, ensuring your revenue from sales keeps flowing freely.
3. Improved Cash Flow Management
There are times when businesses experience short-term cash deficits. The overdraft facility of a current account allows you to draw additional funds immediately without having to take a standalone loan, guaranteeing business operations to keep going on without a glitch.
4. Transparent Record Keeping
Current accounts offer detailed statements, which make it easy to monitor expenses and income. Budgeting, tax return preparation, and account management become a simple affair.
5. Professional Business Image
Operating a separate current account for your business lends an air of professionalism. It indicates to customers and suppliers that your business is professional and well-organised.
Zero balance current accounts – A flexible option
Most small businesses, freelancers, and startups are concerned with having a high minimum balance. A zero balance current account addresses this issue. You get to utilise all the main features of a current account without the fear of low balance penalties.
It is particularly useful for new companies with irregular cash flow. It provides them with the same level of flexibility that they would get from regular current accounts without additional pressure.
Why every business needs one
Without a current account, it becomes cumbersome to manage multiple daily transactions. Using personal accounts for business payments complicates tracking money properly and appears unprofessional. A current account separates business finances, keeps them organised, and makes them easy to manage.
How to open a current account
It is easy to open a current account. You will require:
- Business registration documents (if you have a company or firm)
- Identity and address proof
- PAN card and other KYC documents
Most banks even offer the facility to open a zero balance current account online, which gets done in a jiffy and with no fuss.
Final thoughts
A current account is not merely a bank account; it’s a commodity that ensures the smooth sailing of business. From timely payment to suppliers to handling cash flows during peak times, it facilitates each step of your financial cycle.
If you’re a small company, freelancer, or expanding business, open a current account. And if you need even more flexibility, a zero balance current account is just the right choice to make your business transactions worry-free and organised.
DISCLAIMER – “Views Expressed Disclaimer: The information provided in this content is for general informational purposes only and does not constitute financial, investment, legal, tax or health advice. Any opinions expressed are those of the author and do not necessarily reflect official position of any other author, agency, organization, employer or company, including NEO CYMED PUBLISHING LIMITED, which is the publishing company performing under the name Cyprus-Mail…more
You should not rely on the information as a substitute for professional advice tailored to your specific situation
Click here to change your cookie preferences