Having the correct mix of business bank accounts might help you manage your cash flow better. Here are six reasons why having a savings account as part of that mix may be worthwhile.
1. Prepare money for tax payments.
One day, your financial balance may appear to be really healthy. Then it's time to file your Business Activity Statement (BAS), which requires you to disclose your income and perhaps be taxed on it.
Putting a portion of your salary aside in a savings account might help you avoid the worry of ensuring you have enough money to meet your responsibilities, including any GST you owe.
More information regarding these duties may be found on the Australian Tax Office's website:
Pay as you go (PAYG) instalments
Business activity statement (BAS)
Goods and services tax (GST)
2. Monitor your spending
Although most business owners struggle with the balancing act of the money coming in and going out, managing these transactions is crucial to being able to grow your business.
Monitoring your spending enables you to adjust to changing circumstances and make informed decisions about future marketing and staffing decisions.
3. You can get some interest
Surprisingly, you can actually get some interest on your savings. The interest rates available are probably lower than you'd be offered if you had the money in a high-interest savings account. But the most interesting thing about deposit accounts for business is the ability you have to switch your money from one account to another.
You can generally decide to do this anytime you choose, provided you don't exceed the transaction limits on your account.
4. Access your funds when you need them
Businesses need to be flexible. You never know when you might need to dip into your savings account to cover expenses, which means you need access to the money when you need it.
The more time passes between when you need payment and the date you receive it, the more you'll pay interest on a business loan.'
5. A Visible savings record can help you get more credit
When applying for a business loan, overdraft, or credit card, having a history of putting money away weekly, fortnightly, or monthly can give you a higher chance of approval. It shows that you have the discipline to save money regularly. Of course, if you save enough money and profit from compound interest, you may not need to borrow.
6. Flexibility
Having a savings account is a good option if you're not sure whether you're going to need to draw on your savings. You may have a surplus of funds, or you might need to take out a loan at some point. Rather than tie up your money by putting it into a fixed deposit, a savings account gives you the option to access the funds and take advantage of higher rates when they arise.
Conclusion
If you're not sure what bank account type to choose for your business, talk to your accountant or a financial advisor. They'll be able to help you choose the right accounts for you.
It's about taking control of your future, understanding what your money is doing, and knowing how it will help your business grow and succeed.
The ECommerce Accountant offers you the services of a seasoned Gold Coast accountant. Contact us today to learn more about how we help businesses from different industries!
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