6 Reasons Why Every Small Business Needs a Current Account

Small businesses can be hit with a slew of challenges when it comes to managing the money that comes in and goes out. In this case, the word “small” makes a big difference here. If you have a small business, then you might find it challenging to manage all the cash from customers, suppliers, and other vendors. Fortunately, some financial institutions are aware of this challenge and they offer special services for small businesses. To keep things simple and as easy as possible for your business, you need to open a current account. These are some of the reasons why every small business needs a current account:

1. It’s easier to manage your finances

A current account will help you keep track of your income and expenses. This is really important if you have multiple employees and if you have many clients. With a current account, you can easily record the payments you receive and the money you spend. If you have a current account, you’ll find it easier to pay your employees and suppliers. You’ll probably need to use online banking to do this. That way, you can quickly and easily transfer money to their accounts. And if you have a cash flow problem, you can use overdraft protection to get money from your current account. Your financial institution will charge you a fee for each overdraft, but this is often less expensive than a short-term loan from another financial institution.

2. You can track your spending and income

As we mentioned above, a current account comes with online banking. This is ideal for small businesses that need to keep track of their income and expenses. You can quickly and easily record your expenses. You can also track your bill payments and other income. And when you use online banking to transfer funds from one account to another, you can keep track of the money that goes in and out of your business. This will help you understand your cash flow. It will also help you plan future expenditures and investments. If you have employees, you can use online banking to pay your employees. You can simply transfer the funds directly to their accounts. In fact, many financial institutions let you pay your employees electronically.

3. You can pay employees and suppliers more easily

If you have a cash flow problem, you can use overdraft protection to get money from your current account. That said, you should only do this in an emergency and when you’re sure you’ll be able to pay it back. Your financial institution will charge you a fee each time you use this form of overdraft protection. But this is often less expensive than a short-term loan from another financial institution. If you want to pay your suppliers or employees, you can do that quickly and easily with online banking. If your employees don’t want to get paid electronically, you can still use online banking to pay them. You can simply deposit the money into their accounts or give them a check written on your current account.

4. You can request credit and advance payments from suppliers

Suppliers are usually willing to offer current account customers credit and advance payments. If you use a current account to purchase goods or services, your supplier will likely extend you credit until you pay them back. This is a good way to buy things without having all the cash upfront. But you need to be careful, because your current account balance acts as collateral. If you don’t pay the supplier back, they can use that money to repay the debt. If you’re a current account customer, you can also ask suppliers for advance payments. This is a good way to secure the money you need without having to pay interest. Once you complete your project and receive payment, you can repay the advance payment.

5. You’ll have access to financing options for growth

As a small business, you might want to grow your company. Or you might want to expand your operations to new or different locations. In these situations, you might need to find financing. You can use your current account to get financing. Some financial institutions offer current account financing, which lets you borrow money against your account balance. This is often a good option if you need a small amount of financing.

6. There are no annual fees or monthly fees

Some businesses have what are called merchant accounts. These are accounts that are specifically designed for businesses that accept credit and debit card payments. While these accounts are useful, they come with annual fees and monthly fees. This is not true with current accounts. You won’t have to pay any annual fees and there are no monthly maintenance charges. This is because your current account is designed for individuals. And it’s not designed for businesses that accept cards and other payment methods.

Conclusion

There are many benefits to having a current account. It’s easier to manage your finances, you can track your spending and income, you can pay employees and suppliers more easily, you can request credit and advance payments from suppliers, and you’ll have access to financing options for growth. And there are no annual fees or monthly fees with a current account. So if you run a small business, you definitely need a current account.

Just sign up on OPEN's Dashboard and apply for the current account. Share a few business details to validate your business current account requirements like business name, business category etc. And once you add in all the relevant information, they’ll work with their partner banks to help you set up your current account quickly.