Your Beginner’s Guide To Banking For Business

The backbone of a successful business is steady funding, smooth bookkeeping, regulated cash flows, etc. Isn’t it?

Businesses need to establish, expand and grow. None of which is possible if there is heavy time invested on arranging funds & credit, managing cash flows, and unmanaged bookkeeping that mixes personal expenses with business operations.

Here comes banking for business.

What exactly is banking for business?

Corporate banking or banking for business is when banking services are offered to an enterprise rather than a person. Here, a bank is providing financial services such as business loans, current accounts, checking accounts, cash management, and other banking-related services that are often tailor-made to suit their client’s needs.

Banking for business is different from retail banking where financial services are provided to individuals. Some banks deal with one of these kinds of services while other banks have separate branches under one roof to deal with both businesses and individuals.

Why banking for business is important?

The importance of banking for business cannot be more emphasized. From a legal point of view, competitiveness in the business environment, and success of an enterprise, it becomes necessary to keep finance in check in the hands of banks. Here are the reasons why banking for business is a must!

  • A business is a separate legal entity. So, a separate account has to be maintained to avail the benefits that an enterprise gets such as ease of getting loans, tax benefits, benefit schemes by the government etc.
  • Banks facilitate accurate bookkeeping because they have data of your fund transfers to multiple beneficiaries. They also serve you reports on your highest expenses etc.
  • Since books are clean right from the beginning, your business audit would be quick and clean.
  • Banking for business is a clear sign of professionalism and seriousness towards your enterprise. It is not a hobby but a serious business.

Services offered under banking for business

Banks and financial institutions provide a wide variety of services to companies and enterprises of all sizes under banking for business. These range from managing payroll, cash management, protection from fraud, business checking, financing etc.

Payroll Management: Payroll is an employee’s salary, to be given on the set date as decided previously. With more specialization, enterprises are outsourcing paycheck processing, insurance, employee benefits, tax withholding etc. so that firms could focus on their core operations. In banking for business, companies are provided software and services for the same purpose. So if your firm can’t handle the expense of a bookmaker, then let the bank handle that.

Cash & Expenses Management: A business can achieve greater efficiency by outsourcing its management of receivables, payables, cash in hand, liquidity etc. to banks. Banking for business helps streamline cash management which leads to lower costs. Automatic payment clearing systems allows making investments and payments on time so that surplus money gets used and there is no default in payments.

Easy Financing: With banking for business, access to lines of credit, short term & long term loans, asset mortgage etc. is easily available with less paperwork keeping in mind your enterprise’s capacity to earn and pay. With the ease of access, banks become the primary source of lending and fund management for enterprises.