Locations
Key takeaways:
- A business savings account can help you save for regular expenses, emergencies, and business expansion.
- A business savings account helps you avoid debt that could slow your business growth.
- Don’t wait to open a business savings account; start saving right away.
Developing innovative products, making good hiring choices, setting competitive pricing… As a business owner, you make important decisions every day. One easy decision you can make today is to open a business savings account.
5 reasons you need a business savings account
1. Tax payments
Neglecting to budget for your quarterly tax payments can leave you scrambling for funds when tax season arrives. Plan ahead by setting aside a certain amount of your profits each month for tax payments. A Global business savings account can be a great place to keep these funds. Your money is secure and easily accessible 24/7 through online banking.
Your accountant will help you identify how much money you should be setting aside for future tax payments, based on estimated income or on last year’s taxes.
2. Emergencies
No one wants an emergency to happen, but they do. You might have a valued client who suddenly goes bankrupt, you could experience a fire at your production plant, or you could lose a top-performing salesperson. It’s good to have an emergency stash of cash to help you through hard times until your organization can fully recover.
Experts recommend that you have 3 to 6 months’ worth of operating expenses set aside to cover emergencies, but any amount of savings you can put away will be helpful .
3. Occasional expenses
You’re smart to plan for everyday expenses, but don’t forget the occasional expenditures that can take a big bite out of your budget. Expenses for things like holiday bonuses, semi-annual insurance premiums, equipment maintenance and others can add up.
Take the stress out of these budget-busters by anticipating and planning for them in advance. Consider large expenses from past years, divide that amount by 12 and then put that amount into savings each month. This way, when it’s time to write out those big checks, you’ll have the cash on hand.
4. Expand your business
As your business thrives and your client base grows, you may need to expand your physical location, product lines, or the range of services you offer. A savings safety net can help you accommodate the growth of your business without the need to take out a loan, leaving you with the flexibility for continued growth.
5. Cover cash-flow issues
Even the most successful business can run into an occasional cash flow issue. You may have extra expenses from production, or it may be just a slow sales season. Either way, running low on funds is always stressful because you still need to pay your suppliers, meet payroll, and continue production. A business savings account can help your business continue to operate as usual even when revenues are slow to come.
