Finance

Six reasons why informal businesses should have a business bank account

It is argued that in Ghana Small and Medium Enterprises (SMEs) rely primarily on the personal savings of owners, business profits, family members, or friends for their financial needs. In addition, many small businesses are believed to be running their operations from the personal accounts of their owners.

“The misconception is that running your business and personal finances through a single bank account will save money and spare the business owner the hassles of opening and running separate bank accounts,” the Head of Business Banking at First National Bank, Mark Achiampong, says. “However, there are several considerations which offset any perceived benefits.”

These considerations include:

Legal considerations: For limited liabilities, the law makes room for distinctive separation between the person and the business. Using a company bank account can lead to legal issues for the business owner as well as tax issues. The business owner will need to understand the legal structure of the business to avoid legal pitfalls.

Improved efficiencies: Keeping your business and personal financial activities separate decreases the complexity of understanding the performance of your business relating to cash management and cash flow for the business and the person. The alternative is to manually separate the respective activities, which is time-consuming and subject to human error.

Meticulous record keeping: This allows the business owner to manage and budget cash flow for the smooth running of the business. It also opens the door to categorizing expenses, connecting accounting software to simplify your accounting, and seeing real-time cash flow.

Understanding business finances – by separating your business finances from your finances you can easily track, forecast, and respond to fluctuations in your finances.

Business valuation – If at some point in time, you wish to value your business or even sell it, you will require a clear separation of your business finances and a historic record of business activity, which a separate bank account will support.

Credit applications: Many businesses do not yet have audited financial statements as a record of financial performance. This is where business bank statements come in handy, as a record of your trading activity – from which financial institutions can make lending decisions. It is important to note that business behavior also counts. Keeping up with payments will help you improve your business’s credit score, and it’s easier to track business activity without personal finances muddling your statements.

Professionalism: Having a business bank account gives your business a professional image and demonstrates that you are serious about your business. It also makes it easier for you to receive payments from customers, pay bills, pay employees, and manage your finances.

Compliance: Using a business bank account helps you to comply with regulatory requirements for businesses by allowing you to keep accurate financial records, which is helpful when it comes to paying taxes.

“At First National Bank, we are interested in helping you streamline your business and finances with a combination of tailored financial solutions, expert advisory, operational efficiencies, networking opportunities, risk management strategies, market insights, and expansion guidance,” Mr. Achiampong added. With these services at your disposal, you can confidently embark on scaling up your business, realizing your ambitions, and contributing to national economic prosperity.

 

Source: thebftonline.com

Ogyem Solomon

Solomon Ogyem – Media Entrepreneur | Journalist | Brand Ambassador Solomon Ogyem is a dynamic Ghanaian journalist and media entrepreneur currently based in South Africa. With a solid foundation in journalism, Solomon is a graduate of the OTEC School of Journalism and Communication Studies in Ghana and Oxbridge Academy in South Africa. He began his career as a reporter at OTEC 102.9 MHz in Kumasi, where he honed his skills in news reporting, community storytelling, and radio broadcasting. His passion for storytelling and dedication to the media industry led him to establish Press MltiMedia Company in South Africa—a growing platform committed to authentic African narratives and multimedia journalism. Solomon is the founder and owner of Thepressradio.com, a news portal focused on delivering credible, timely, and engaging stories across Ghana and Africa. He also owns Press Global Tickets, a service-driven venture in the travel and logistics space, providing reliable ticketing services. In addition to his media ventures, Solomon serves as a Brand Ambassador for Alabuga, a prominent Russian industrial company, representing their interests and expansion across Africa. He previously owned two notable websites—Ghanaweb.mobi and ShowbizAfrica.net—both of which contributed to entertainment and socio-political discussions within Ghana’s digital space. With a diverse background in media, digital journalism, and business, Solomon Ogyem is dedicated to telling impactful African stories, empowering youth through media, and building cross-continental media partnerships.

Related Articles

Back to top button