Handling your business’ financial account and keeping track of your expenditure along with your income are all things you need to do to run a successful business. A lot of business owners don’t think of putting in money away in a savings account. Having a savings account is like having a safety net.
Your business account balance might be positive but if you have not been saving, it doesn’t really say good things about the culture of your business. Saving is a very positive and important habit every business must cultivate. You need to make sure that you putting a little of your income into a savings account after every transaction if you haven’t already. Here are 3 reasons why you should have a business savings account.
1. Unexpected Expenditures
Having a savings account gives you a lifeline when the unexpected happens. Just like in your personal life where you have unplanned expenses. Your business can experience a bad month where there is no income or not as much as usual. A new software, equipment of product pertinent to your industry could land on the market. Having money aside could put you in front of others in the same sector. Keep in mind that it is important that this money isn’t tied to any projects. It has to be liquid.
2. Improved Credit
When your business has a bit of cushion, it bodes well for your business in the end. Other companies who wish to do business with you like invest in your company, are encouraged when they see that your company is sitting on a comfortable amount of money. Your dealings with financial institutions go down much smoother. Whether it be an audit or a huge loan request, a good amount in your account goes a long way. Develop a saving culture today!
3. New Projects
Having some money set aside opens you up to finding new opportunities to invest and subsequently grow your business. You’ll be more open to potential growth when you are financially able to stand even if some of them do not work out. As a business owner, you are no stranger to the concept of risks. Taking your business to the next level might just depend on it.
Take time out to discuss your finances at length with your accountant or whoever is in charge of your books. So you can figure out a percentage that is comfortable enough for you. So you can continue to maintain it and set it aside from your income after every transaction.