Financial intricacies can be burdensome to anybody, even to business owners. That is when a business needs to dig out its savings to sustain its operations.
Running a business can be challenging for new business owners, and sometimes the need to plan and save funds might blur while combating new challenges. However, Singaporean business owners need to open a savings account specifically for their business to ensure they always have the funds ready when the need arises. No financial planning is complete without savings. This rule also applies to companies.
Some of the best savings account Singapore has, are just a google search away. Below are some more reasons why having a savings account can be a smart financial strategy for business owners in Singapore.
- It can act as a safety net: As the introduction of this article iterates, the financial market can be unpredictable. The world has seen an excellent example of this: the covid-19 pandemic. Companies paused several business operations, and some had to be shut down due to insufficient funding. Some businesses could navigate safely through it because they had substantial savings that aided them in keeping different functionalities running even when the income dropped below net zero. Of course, businesses don’t need to live through another pandemic to realize the importance of savings, and financial disturbances can arise even when there’s no pandemic.
- Earn extra through interest: Interest on the amount saved in the bank can mount exponentially over several years, ultimately strengthening the company’s financial planning. Even when there’s no profit, interest from the bank is always assured. This income can be used to pay the extra taxes that may intervene in the company’s annual budget.
- Expand your business: Incorporating new business outlets in different sites requires a significant initial investment. Giving money for it through the business’ daily transaction account would cause chaos for the account managers as the budget would be disturbed. Setting up new branches requires careful financial planning. Thus, saving some percent of the profits each year in a separate account can make it easier for you to keep track of all the expenses needed to set up a new outlet
- Grow your business: Sometimes, some campaigns run by the company may require more funds than forecasted. Or, campaigns may require some spontaneous purchase or investment. In such instances, drawing money from a savings account can help.
- Get business loans approved faster: Establishing a good relationship with your bank can strengthen trust. If you have a considerable amount saved up in your savings account, the lender is more likely to accept the loan amount as long as you provide adequate proof of safety.
While it’s integral for every corporation to open and maintain a savings account to accumulate business-related funds, this strategy can work more effectively if the business owner opens multiple savings accounts dedicated to different long-term expenses. This way, it’ll be easier for the business owner to assess if they have sufficient funds to fuel their big business goals.
