Finances play a very important role in every business. It is even unimaginable to start your business without financial awareness. While everyone is aware of basic finances, are we aware of business banking? Business banking is a feature that enables corporates to avail of various services like easy business loans, digital payments, cash flows, and more.
When you will open business bank account, you will experience that all the features are completely designed to make your business finances seamless. The best part is that business banking allows you to get instant loans in a hassle-free process. In addition to this, many more features make business banking important for companies.
In this article, you will learn a detailed overview of business banking and how it will be beneficial for your business.
What is business banking?
Business banking or commercial banking is a financial solution provided by banks to businesses with a bunch of business-specific activities and financial services. Usually, included services are business loans, credit cards for managing business expenses, checking accounts, money market accounts, equipment lending, trade finances, treasury management, payroll services, insurance services, asset management services, etc.
How does business banking work?
Banks provide financial solutions to enable companies to manage their finances smoothly. They customize their business banking services to satisfy the unique needs of your business. They opened up a separate department to manage their business tasks exclusively for business owners. However, before opening your business account in a particular bank, you need to submit detailed documents of your business. For example, your business licenses, articles of incorporation, articles of organization, investment details, employee numbers, types of organizations, etc are mandatory.
Difference between business banking and personal banking
| Business Banking | Personal Banking | |
| Who can use it? | Any business entity can use business banking services. | Any individual can use personal banking. |
| What are the major products of business banking? | Business banking facility offers checking and savings accounts, certificates of deposits, business loans, credit cards to manage business expenses, etc. | Personal banking offers mortgages, personal loans, lines of credit, personal credit cards, generic savings accounts, fixed deposits, etc. |
| Services offered by business banking | Major business banking services are treasury management, cash management, payroll management, insurance details of individuals and business assets, investments, etc. | Personal banking may offer currency exchange, insurance services, etc. |
Advantages of business banking
There are several benefits of business banking as mentioned here.
- As you need to open a completely different merchant account to operate your business expenses, you are able to separate your personal finance and business finance.
- You can easily track your business expenses through a transaction tracker.
- You can manage cash flow to back up your operations.
- When auditing runs your business, it becomes easy to file your income tax without mixing your personal finances and business finances.
- All businesses are vulnerable to legal issues. You can avoid those legal hassles with the help of business banking.
- Business banking can offer separate business-related applications to operate your payments to manufacturers or your payments from customers. For example, you can have a different Google Pay for business app to control your transactions effectively.
- You can carry out any number of transactions required for your business.
- Business transactions are faster and smoother; also they are secured with all kinds of legal documentation.
Conclusion:
To operate the business effectively, opening a business account with detailed facilities is mandatory. It can effectively tackle all business-related finances. Besides, you can stay hassle-free from separating your personal and business finances. So, no matter what the size of your business is, you must stay ahead of the time by implementing business banking to track your finances significantly.