A current account is a type of bank account that is primarily used for businesses to carry out their day-to-day financial transactions. Small businesses in India can benefit greatly from having a current account. In this article, we will discuss five benefits of having a current account for small businesses in India.
Separate account for business transactions
Having a current account allows small businesses to separate their personal and business transactions. This makes it easier for business owners to keep track of their finances and manage their cash flow effectively. A current account provides a clear record of all business transactions, making it easier to prepare financial statements and file tax returns. It also helps to avoid confusion when it comes to reconciling bank statements.
An overdraft facility is a credit arrangement that allows businesses to withdraw more money from their current account than they actually have in the account. This can be helpful for small businesses in India that experience cash flow issues. With an overdraft facility, businesses can avoid bouncing cheques and paying high penalties for non-sufficient funds. An overdraft facility can also help businesses to bridge the gap between payment of bills and receipt of payments from their customers.
Access to credit
Small businesses in India can benefit from having a current account with a bank that offers business loans. Having a current account with a bank can make it easier to obtain a business loan. Banks are more likely to approve loan applications from businesses that have a good credit history and a steady cash flow. A current account can help businesses build a good credit history and establish a relationship with the bank. This can increase the chances of getting a business loan when needed.
Online banking and mobile banking
Most banks in India offer online banking and mobile banking services to their customers. Small businesses can benefit greatly from these services as they allow businesses to access their accounts and carry out transactions from anywhere and at any time. This can be especially helpful for businesses that operate from multiple locations or have remote employees. Online banking and mobile banking services can also help businesses save time and reduce paperwork.
Many banks in India offer merchant services to their customers. Merchant services allow businesses to accept credit and debit card payments from their customers. This can be beneficial for small businesses as it can help them to increase sales and attract more customers. Merchant services also provide businesses with a secure and efficient way to accept payments, reducing the risk of fraud and theft. Additionally, merchant services can help businesses to streamline their accounting processes by providing a clear record of all transactions.
In conclusion, having a current account can provide small businesses in India with several benefits. It can help businesses to manage their finances effectively, avoid cash flow issues, and access credit when needed. Additionally, online banking and mobile banking services can help businesses save time and reduce paperwork, while merchant services can help businesses to increase sales and streamline their accounting processes. Small businesses should consider opening a current account with a bank that offers these services to take advantage of the benefits they offer.