Business owners can attest to the unending solicitation they receive regarding new business accounts from various financial institutions. These institutions continue to come up with attention-grabbing perks that include better interest rates, lower fees and wise investment of your money.
With so many banks coming at you at once, it can be difficult to know which one to choose. But do you need to choose just one? Can you have multiple business accounts at more than one bank? How does this help and what are some of the risks?
Pros of Having Multiple Accounts
Organization. Some businesses have found that having multiple accounts can actually help them stay better organized when it comes to management of funds. For instance, having a separate account that is primarily for payroll can help to keep things under control and clear for bookkeepers. It may be helpful to have a separate account for large business expenditures or for sales reps that may be using allocated funds for entertaining potential clients.
Better Interest. Business owners are always eager to find ways to bring in more money or to put their savings to work for the business. Having multiple accounts allows you to keep your options open when it comes to managing your investments and savings.
Keep Things Spread Out. Another major reason for having more than one business account is to allow yourself to have access to your money from various locations rather than having it all tied up in one account. Sometimes having all of your eggs in one basket can become a major hindrance. Keeping your capital diversified gives you more access to it when necessary.
Cons of Multiple Accounts
Management Difficulty. Perhaps the biggest downside to having multiple business bank accounts is that it can become an overwhelming task to stay on top of all of the accounts at once. Do you have a small business without a dedicated accountant? You may find that you run yourself crazy trying to keep track of passwords and calculations.
Minimum Deposits. Are you considering opening more than one account? Think about how much money you will have available to deposit in each account. Many business accounts require a minimum balance in order to waive any account fees. If you find that you typically only have a minimal amount of money left over month to month, multiple accounts may not be the solution for you.
You can learn more about the advantages and pitfalls of having more than one business account. Work with an experienced accounting firm like Hacker Accounting. Give us a call to find out how we can help you manage your money more effectively. Even whether multiple accounts are appropriate for your specific business. You can reach us at 602-375-5251.