Why Is It Advantageous To Have a Separate Business Account In Singapore?

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Most start-ups and SMEs start a business by having funds from personal savings. The idea is not bad, as you need the fund readily available to establish the business. However, you will encounter problems in using your credit cards and personal bank account for business-related activities in due course.There is no legal rule declaring that you must have a corporate bank account Singapore. Sole proprietors may not feel the importance of owning separate bank accounts for personal and business purposes. Why?

  • Opening a corporate bank account is a time-consuming process.
  • There is a need to pay personal income tax based on the net income.

But, when you have a corporation, you need to consider creating a bank account only for your business.

It is convenient to maintain separate bank accounts for business and personal needs.  While you need some effort, the business bank account will provide you with several benefits.

Let us show you the reasons for which you must consider a corporate account opening Singapore.

Bookkeeping and accounting- Stay organized

Have you used your debit and credit cards for business deals? Then, you may face challenges to distinguish personal transactions from business ones. When you have a separate business bank account, you can easily track everything. For instance, you may maintain accuracy in your bookkeeping activities. Moreover, you do not need to sift through receipts and statements for several months. The best fact is that you can link your accounting software to the corporate bank account to track real-time revenues.

Present clear records during audits

When your business banking and personal banking account is not separate, your accountants cannot easily find business-related financial deals. They will also encounter problems in the tax audit process.

The audit agency can audit your business at any time. When you have not opened a business bank account, the audit specialists will review your accounts to look for business transactions. It can result in complications and questions. Thus, to stay safe, you can open your business bank account in one of the best banks in Singapore.

Tax returns become easier

By maintaining separate personal and business bank accounts, you will not feel stressed during the tax paying season. Your filing for tax returns will be more accurate.

When you have not differentiated your personal finance from the business ones, it takes hours and days to check bank statements. Moreover, there is a risk of making errors.

The separate account creation for two different purposes will simplify the way of having records. It will be easy to detect potential tax deductions and other related benefits.

Manage your cash flow accurate

It is always essential to have a clear picture of the cash flow of your business. You can identify the present financial situation of your business by owning a corporate bank account. For instance, when you have noticed a low balance in your account, you may deposit cash instantly. Similarly, when you find a very high balance, you may use some funds for other purposes.

Develop a positive image

A positive impression is significant for every business. When you write checks using your account, it does not create a positive image. Transfer of funds from your corporate account builds the confidence of your customers and conveys your business strength.

Now, you can decide to create a separate account for your business. Today, it’s easy to open a savings account online. You do not need a long time to open your CIMB Business Account Singapore. With a few simple steps, you may create the account.

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