How Many Bank Accounts Do Businesses Need?

This article helps business owners optimize their banking setup for maximum financial health.

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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 operation being run, cash flow needs, if you need credit cards, and the documents required.As Anssi Enroth, Financial Management Specialist at Valjas, points out: "The primary purpose of the balance sheet is precisely to track where the money comes from and where it is located at any given time." This fundamental principle should guide your banking structure.Taking advantage of the right banking tools for your business can help you manage cash flow, separate expenses, and maximize investments. The key is to maintain a clear view of your company's financial position through your balance sheet while keeping your banking structure as simple as possible. But how many bank accounts do proprietors really need?In this article:
  • How many bank accounts do you need?
  • Core account types
  • Can and should you have multiple business IBANs?
  • Full FAQ

Key Takeaways

  • Simplifying your banking structure can enhance balance sheet visibility and improve cash flow management.
  • Having a backup operational account with a different bank is a strategic move to safeguard against disruptions.
  • Specialized accounts like foreign currency accounts should be added only as needed to meet specific business needs.
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How many bank accounts do you need?

While many sources suggest multiple accounts for different purposes, professional accountants often recommend a more streamlined approach focused on essential business needs and balance sheet clarity. Regardless, most companies should have at least one IBAN (International Bank Account Number) as their primary operational account.

Core Business Account Types

Based on accounting best practices, here are the essential account types most businesses should consider:

Main Operational Account

  • Primary account for day-to-day business transactions
  • Handles main expenses and revenues
  • Consolidates operational expenses for better tracking and management
  • Helps maintain clear visibility of accounts payable, salary liabilities, and tax liabilities on your balance sheet

Backup Operational Account

  • Maintained at a different bank than your primary account
  • Serves as a contingency measure for banking service disruptions
  • Ensures business continuity during technical issues or system maintenance
  • Provides the easiest access to funds together with the main operational account

Foreign Currency Account (if needed)

  • Useful for businesses making regular purchases or receiving payments in different currencies
  • Helps manage currency reserves and hedge against exchange rate fluctuations
  • Can be used strategically to reserve currency in advance for known purchases when exchange rates are favorable
  • Particularly important for international trade

Fixed-Term Deposit Account (optional)

  • For companies with strong quick ratios
  • Helps preserve value of excess funds not needed for immediate operations
  • Protection against inflation through interest earnings
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Can and should you have multiple company accounts?

In short, absolutely. Having separate accounts, especially with multiple users, can help you better manage your business finances by keeping separate holdings for specific purposes, e.g., an alternative investment fund having several IBANs for different types of investments. There are some special considerations. Some businesses may require additional specialized accounts:

Customer Funds Account

  • Required for businesses handling client money or receiving reservation payments
  • Particularly relevant for payment service providers or companies managing advance payments
  • Keeps customer funds separate from operational finances

Security Deposit Accounts

Restricted Budget Account

  • For specific purposes like advertising spending, with set withdrawal limits
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Side note: even if a company would definitely benefit from having multiple business bank accounts for different purposes, in reality, some, especially operators with small AUM (assets under management) in finance or investment, are able to get only a single account open. This is due to the risk assessment of their banks.

Risk Management Perspective

"If the main banking service provider experiences an unexpected disruption, a backup account at a different bank could be useful to ensure that operations don't come to a complete standstill, even for a moment," explains Anssi Enroth, Financial Management Specialist at Valjas. This practical approach to risk management highlights why some redundancy in banking relationships can be beneficial, even while keeping your overall account structure simple.

Questions to ask when selecting accounts

If you’re still on the fence about whether you should open multiple 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 accounts for payrolls, taxes, and other payments. This good idea can prevent any issues with overdrafts or late payments. 
  • Do you want to earn interest? If you have savings goals or are looking to get the most out of your money, then having a high yield savings account is a great way to earn interest on any leftover funds after covering expenses. Most checking accounts don’t offer interest, so keep an eye out for favorable terms.
  • Do you need to manage multiple currencies? If you’re trading 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 finances and business finances apart. It depends on the nature of your venture 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 account. Likely, one for business expenses would be enough in this case — if you keep your emergency fund, or nest egg, separate. Some light entrepreneur bookkeeping and invoicing services might allow sole traders to use their personal accounts for company payments.
Consider this article a starting point — this page does not replace financial advice from a licensed professional tailored to your enterprise. Always check with your accountant how many separate fund storages your operation should have.
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FAQs

While businesses can have multiple accounts, professional accountants often recommend consolidating operational expenses in one main account for better oversight and simpler bookkeeping. Additional accounts should serve specific purposes like foreign currency operations or customer funds management.
Most small business owners need a primary operational account for day-to-day transactions and potentially a backup account at another bank for risk management. Additional accounts like foreign currency or fixed-term deposit accounts should only be added when there's a clear business need.
Yes. Multiple operational accounts can complicate expense tracking, make payment management more challenging, and increase the risk of insufficient funds in individual accounts. The primary purpose of the balance sheet is to track money flows, which becomes more complex with numerous accounts.
When choosing a bank, look for one that offers great starting perks. Free basic checking, low or no fees, and robust online tools make managing money easier. Global groups are strong options if you do business in Europe. They have locations throughout the countries where you operate — but all processes will be long and fees will be high. On the other hand, neobanks (or EMIs - electronic money institutions) will make nimble partners who process payments and questions faster and provide a tailored service. Doing research up front helps pick a banking partner that supports your business for years to come.
Focus on maintaining a primary operational account for day-to-day transactions. Additional accounts should only be established for specific purposes like foreign currency management or customer funds. This approach helps maintain clear visibility of accounts payable, salary liabilities, and tax liabilities on your balance sheet.
Yes. LLCs can have multiple bank accounts to keep their finances organized. This is especially helpful for companies with different departments, locations, or financial goals like taxes and payroll.
While there is no minimum balance requirement, some advise having enough in your main account to cover 3-6 months of operating expenses to cushion unexpected dips and cash flow slowdowns — this could work for companies with steady revenues. For startups in the go-to-market phase, it's generally good to have 24 months of runway while building revenue streams.
Most recommend no more than 5-7 accounts for proper oversight. Signs of too many accounts include difficulty tracking balances and transactions across accounts and paying excessive fees on underused accounts.
Large corporations often have dozens of accounts for different divisions, projects, and international branches.
Yes, keeping personal and business finances separate makes record-keeping simpler and protects your personal assets.Yes, keeping personal and business finances separate makes record-keeping simpler and protects your personal assets.
Does your business work in places that use different currencies? Then a multi-currency bank account can make switching between euros and dollars less of a headache. You won't pay as much in fees either. Other than that, use accounting software, set up automatic transfers, and regularly reconcile accounts to ensure accurate bookkeeping between all accounts.
While it might seem helpful, having too many bank accounts can actually make things more difficult when it comes to separating and managing money and filing taxes.
No, as long as they are organized and reconciled properly. More than 7-10 accounts signals the need to consolidate or improve account management practices.
Yes. Many companies open accounts at more than one bank. This is so they can access different services and safeguard funds in case of bank issues. Just be sure to track transactions across banks.
It's highly recommended to keep personal and business finances separate for tax, liability, and bookkeeping. Having a separate business account gives you a better view of your company's finances.
Some types of corporate bank accounts do, such as business savings accounts, but generally, they don't have higher interest rates. The better perk is having separate accounts dedicated to your business needs.
Yes, a limited company (LLC, corporation, etc.) can legally have multiple bank accounts. Just be sure to reconcile them regularly.
It's beneficial but not required to use separate banks for personal and business accounts. Using the same bank offers convenience (and potentially lower fees) but reduces risk and separation between personal and company finances.
It's generally not recommended for tax and legal reasons. A separate business bank account is like having a shield for your personal finances. It also helps you stay organized.
Business bank accounts are used to manage all financial transactions related to operating a company: deposits, payables, receivables, payroll, taxes, purchases, and other everyday business expenses.
Documents required for company bank account opening are an ID for authorized signers, company documents, an initial deposit, and selected account features and services. In the EU, financial institutions will do a KYC questionnaire and request further documents according to the AML procedures. Institutions may do a credit check or ask about expected monthly transactions.
A company would need at minimum four ledgers—one for each bank account—to separately track all deposits, withdrawals, and balances within each account.
Most small businesses do well with 1-3 checking accounts. Having more than 5-7 can mean organization issues or unneeded complexity; consolidation may then help.
It can really help a business to have separate bank accounts. Keeping expenses, payroll, savings, and taxes in different spots makes your money easier to manage. Just be sure to stay on top of transactions between accounts. Established European banks and neobanks offer business packages that include multiple checking accounts. The right setup supports your company's growth.
Essential accounts typically include:
  • Main operational account for day-to-day transactions
  • Backup account at a different bank for risk management
  • Specialized accounts only when needed:
    • Foreign currency account for international operations
    • Fixed-term deposit account for excess funds
    • Customer funds account for specific business models
The key is maintaining clear balance sheet tracking while keeping the structure as simple as possible.
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Narvi Payments

Your All-In-One Business Account: Narvi Payments

If you’re looking for an all-in-one corporate banking solution, 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 for one business or a business group. You also have access to a powerful team of seasoned professionals in the banking and fintech industries who aim to process questions and payments within days, not weeks.For companies that do trade across borders, we make it easy with dedicated IBANs, global SWIFT wire transfers to and from 100+ countries, and instant SEPA payments.Interested in better business banking? Learn more and schedule an intro call to see if Narvi fits your company's needs.
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Originally published February 3, 2023. Updated October 30, 2024.Author
  • Noah Edis, online entrepreneur and writer in the SaaS and fintech space. Noah has contributed to SEMRush, NordVPN, and dozens of other seven-figure content companies.
  • Valeriya Kushchuk, now Narvi's Digital Marketing Manager, previously a business reporter and marketer in the crypto space.
  • Sarah Ruthe, content editor who writes for Narvi about money and payments.
  • Article prepared with the help of Anssi Enroth, Financial Management Specialist at Valjas, an expert firm in accounting, payroll, and comprehensive financial management services.
Disclaimer
This publication is provided for general information purposes and does not constitute legal, tax, or other professional advice from Narvi Payments Oy Ab or its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.
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