Regarding personal and business finances, it is essential to have a bank account, so we can adequately manage our resources and effectively reconcile the monthly financial movements. However, depending on the situation of each company or business, it may be more convenient to have an additional bank account. Following, we will learn some benefits of having multiple bank accounts.
Greater financial control
Having several bank accounts is an effective way to have greater financial control since this will allow us to organize our resources into different items or groups. Each bank account will provide us with an independent account statement through which we can observe and verify the financial behavior during a specific period, allowing us to control the cash flow better and manage the company resources efficiently.
Sometimes, using separate bank accounts allows for better cash flow management. For example, an account could only receive income and another to pay expenses, considerably simplifying the management of the company’s or business’s daily finances.
Increased security and backup in case of emergencies
Although many bank accounts have a high level of security, there is the possibility of having some incident or problem in the future that may temporarily prevent us from accessing our financial resources: losing our credit/debit card, hacking our phone/laptop, losing or forgetting of password, economic fluctuations, etc. However, by having more than one bank account, we can access a “backup” account, which can help us in cases of emergency. This provides financial security and avoids unexpected expenses to affect negatively the commercial transactions of the company.
Tax management
Separating incomes, expenses, and budgets in different accounts can simplify tax filing at the end of the fiscal year, which can be useful in medium-sized companies with operations in different territories or that have different departments or projects. Having multiple accounts also helps to avoid confusion and errors in the company’s tax return.
Having more than one financial ally
By having multiple bank accounts, we can access financial products that other entities offer, this way, we can have more than one “financial ally” to manage our resources and access different benefits such as multi-currency accounts, better support, credits, batch payments, more modern platforms/solutions, etc. which allows our company to leverage these benefits, thus increasing the chances of meeting our financial goals in the short, medium, and long term. For example, many companies that have accounts in traditional banks turn to Fintech for accessing more modern and effective platforms.
24/7 online banking
Nowadays, thanks to technology and the different financial solutions that exist in the market, users have control of their finances from anywhere, being able to have access and control accounts from the Internet 24/7 (twenty-four hours a day, seven days a week). However, although most financial institutions offer online channels or platforms to their customers, these platforms have “temporary” failures caused by some internal error, maintenance, or simply an update of the platform. Having more than one bank account (in different entities), you have the advantage of accessing an alternative online platform, especially if the first option is temporarily inoperative.
Helps meet objectives and responsibilities
Having more than one bank account can help meet business objectives orderly and efficiently, since each account can be assigned with a specific purpose, keeping finances separate and allocating a budget to each account.
Businesses can use separate bank accounts for specific, such as saving for future investments, emergency funds, long-term project development, and expansions, among others. All this facilitates the tracking and accumulation of funds to achieve established financial goals.
Facilitates the expansion and diversification of the company
As the company grows and expands into new markets or territories, it may become more difficult to manage its financial operations or control its resources. Having separate bank accounts can help manage the company’s financial operations in different locations or markets more efficiently and effectively.
What do you think about this topic? Do you know of any other benefits of having multiple bank accounts?
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