There are approximately 41.5 million SMEs in Nigeria, according to SMEDAN, the Small and Medium Enterprises Development Agency of Nigeria. However, most of these businesses are primarily run as a hobby rather than an actual profession, thereby causing business owners to miss out on business banking deals and services that could save them time and upgrade their businesses
So, “what would Nigerian business owners who find themselves in this situation do?”
Discover all you need to know about having a business bank account.
What is a business bank account?
A business bank account is a financial account opened for business purposes. It helps to stay coordinated and separates personal finances from business finances. Unlike regular accounts, which are known for receiving and sending out money, a business account has several features tailored for business operations, such as sending invoices, managing payroll for employees, organizing tax, and supporting your accounting systems. Whatever needs you have, best believe that there is a business account type suitable for you.
Why have a business bank account?
- Enhances Business Credibility:
A business bank account increases trust among customers. It enhances a business’s image credibility and perception of the business. Separating your personal account from your business account demonstrates professionalism and makes people believe that your job is not just a hobby.
2. Facilitates organized Bookkeeping and Simplifies Tax
With a business bank account, you can easily track your income and expenditures immediately. You can generate a report that tracks your business’s financial health, saving you time from separating personal income if they had been together. It helps to simplify the collection of your financial information, including the preparation of taxes. With this knowledge, you are setting your business up for success.
3. Provides heightened financial stability
With a business bank account, you can plan your business financial cashflow better and improve your financial stability. You get to track how much you can pay yourself as a salary and how much goes back into the operating costs of your business. With the cashflow forecast, you get to make more informed financial decisions.
4. Essential for loans or grants access:
Without a business account, you lose the chance for loans, grants, or investments. A business financial statement is needed to track your business financial history, which in turn determines your eligibility for access to credit. It is far better to show that you’ve always followed financial best practices and kept your business’s money in its own account.
5. Enables Software synchronization
Accounting software links your financial information, such as bookkeeping, tax information, invoicing, and payments, to your business bank account. The software would automatically track transactions in your bank balance, update it, match them to your sales and purchases, and reveal cashflow forecasts.
6. Provides legal protection
A business bank account is required for incorporation or Partnership. When a business incorporates, it becomes its own legal entity and is set apart from the individual (or individuals) who founded the business.
What do I need to Open a Business Bank Account?
To open a business bank account, you would need the following:
- A valid Business Name Registration certificate
- Certificate of Incorporation
- Tax Identification Number (TIN)
- Memorandum and Articles of Association
- Names, addresses, and identification of all directors and signatories
- Utility bill of the company’s registered address
- Passport photographs of all directors and signatories
How To Choose a Business Bank Account Provider
When selecting a business bank account provider, consider factors such as fees, services, accessibility, and customer support. Compare the fees and charges associated with each bank, ensuring transparency and competitiveness. Evaluate the range of services offered, including online and mobile banking features, to meet your business needs. Finally, assess the bank’s reputation, stability, and specialization to make an informed decision. Regardless of your business type, be sure to ask questions.
You might want to ask, ‘What happens when you do not have a Business Name Registration certificate?
Getting one just got easier with Billboxx! All you need to do is set up your account on the platform and our support team will reach out to you to get the necessary documents to help with the registration.
List of documents needed for CAC Business Registration
- The name of the business.
- The objective of the business
- The business memorandum and articles of association
- Statement of the authorized share capital
- Form CACC 1, reservation and availability of Name.
- Names and addresses of the parties incorporating the company
- Two recent passport photographs of every director and authentic means of identification.
- Statutory declaration of compliance by a legal practitioner.
- Name and address of the company secretary
- Address of the principal business office
- Filing with the Federal Inland Revenue Service for the purpose of tax.
- All other documents or fees that may be needed by the commission to satisfy any law or condition.
Conclusion
Registering a Business Bank account is an important process for business growth. With all the information provided in this article, you have all you need to set up a business account in your business name.
Click here to open a bank account for your business with Billboxx and enjoy the countless benefits your business needs to succeed.
