How Many Bank Accounts Do Businesses Need?
This article helps business owners solve the dilemma of how many bank accounts your business should have.
If you’re a business owner, you’ve likely been in this dilemma for some time. It can be confusing to decide how many bank accounts your business should have. To answer that question, there are a few things to consider, such as the type of business you’re running, your cash flow needs, and the type of banking instruments you need to open. While checking and savings accounts are the two most common types, other specialized options are available depending on your needs.Taking advantage of the right banking tools for your business can help you manage cash flow, separate expenses, and maximize investments. But how many bank accounts do businesses really need? We’re here to answer that question.How many bank accounts do you need?The answer to this question varies depending on the size and type of business you’re running. Regardless, most companies should likely have at least two IBANs (International Bank Account Number) – a checking and a savings one. Checking is used for day-to-day expenses such as payroll, taxes, bills, and other payments. Savings is typically used to keep cash reserves in case of emergencies or unplanned expenses. For larger businesses with more complex financial needs, there are other types of tools that may be beneficial. For example, a business credit card might be necessary to manage expenses and track spending more efficiently. A merchant account is recommended for businesses that accept credit cards or need to process payments online. And if you’re looking to invest funds, consider opening up an investment account with a financial advisor or brokerage firm.Can you have multiple company accounts?Absolutely. In fact, having separate holdings can help you better manage your business finances by keeping separate holdings for different purposes. Having additional accounts allows you to track expenses more accurately and gives you greater control over where your funds are allocated. If you have a checking account for day-to-day expenses and a savings account for emergencies or investments, it’s easier to keep an eye on both at the same time. It also prevents any confusion about where money is coming from and going to.Should you have multiple business IBANs?If you’re still on the fence about whether you should open more than just two basic business accounts, we’ve put together a list of questions to help you decide.
- What are your cash flow needs? If you’re expecting high levels of income and/or large payments, it might be useful to keep different reserves for payrolls, taxes, and other payments. This will help prevent any issues with overdrafts or late payments.
- Do you want to earn interest? If you’re looking to get the most out of your money, then having a savings account is a great way to earn interest on any leftover funds after covering expenses. Most checking accounts don’t offer interest.
- Do you need to manage multiple currencies? If you’re doing business in different countries, having a multi-currency account can help simplify transferring money between currencies.
- Do you run an LLC? If you’re running an LLC, a separate business account might be required to keep your personal and business finances separate. It depends on the nature of your business and whether your limited liability company can use designated fund storage for daily expenses and emergencies.
- Are you a sole trader? Check why you should have a separate business bank account. Likely, one for business expenses would be enough in this case — if you keep your emergency fund, or nest egg, separate.
Article updated August 23, 2024AuthorValeriya Kushchuk, now Narvi's Digital Marketing Manager, previously a business reporter. Valeriya has been a solopreneur since 2016.
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Your All-In-One Business Account: Narvi Payments
If you’re lost in the list of all-in-one business payments & banking solutions, then Narvi Payments is the answer. We’re an online banking solution based in Finland that combines minimalist Finnish and Nordic concepts and sophisticated fintech.With Narvi, you can open multiple accounts and manage them all in one place. You also have access to a powerful team of seasoned professionals in the banking and fintech industries.For companies that do business across borders, we make it easy with dedicated IBANs, global SWIFT wire transfers to and from 100+ countries, and instant SEPA payments.Ready to benefit your business with our sleek approach to banking? Book an intro call to find out if Narvi is right for your business needs.
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