Being self-employed or a business owner has always meant that changes must be made consistently within the daily business world in order to hold grip on, and stay opened enough to grab those wonderful opportunities that can become present once the correct procedures and systems are being implemented. Even more so, if you are of the employed category as well within your business. Thus, with that being said, let’s look at some of those opportunities that can be predominantly found within the banking sector after you have made that immense commitment and decision of ‘Opening a Business Account’ at your preferred Banking Institution.
What is a ‘Business Account?’
A business account is simply an account opened at any bank of your choice that gives access to self-employed individuals to lodge, deposit or withdraw business transactions on a daily basis. Now, let’s imagine ourselves as employees for a while and look at how we get paid throughout our time. Just look at how our salaries and reflected in our bank accounts and then question ourselves in the same light, like; ‘if I am running a business doesn’t that mean that I ought to do the same thing?” Your answer should be yes! When running your business, you will need to pay your employees, suppliers, bills or even yourself by transferring, writing cheques or handling withdrawals from a BUSINESS BANK ACCOUNT.
Many persons when unregistered, somehow take the risk of starting from a personal account which is usually unregulated and then ultimately prompted of a breach based on the high volume of cash going through that said personal account. Which is usually that of the savings category. Thus, these factors will ultimately force these individuals to register their businesses in order to gain access to a business chequing and business savings account. Which is far better to handle transactions that involves large volumes of cash. With the added fact that these accounts, just like personal accounts can be opened in other currencies like USD or UKD if needed. Which is not a bad idea based on the downward trend in value of our Jamaican dollar.
What’s needed to Open a Business Account?
In order to open a business account you’ll need to have these documents:
1. Business Certificate: As you should know by now, business registration is done at the Companies Office of Jamaica. This will help you to gain access to a business name in the type of a Sole Trader (Trade As), Partnership, Company Limited or Non-Profit Organization. Once the process is completed, you’ll then be given a Business Certificate which will show the necessary details of your Business such as: Business Name, Name(s) of proprietor(s)/partners, Business TRN, NIS Reference number, Business Address, Business Nature and date of registration. And also, it is important to note that you will be given an Articles of Incorporation if your business was registered as a Company Limited which predominantly shows how ordinary or preferred shares were shared amongst shareholders. Other details such as director(s) and the secretary’s information are also shown.
2. Tax Compliance Certificate (TCC): A TCC is given at the Tax Administration of Jamaica to any entity or person that are deemed ‘tax compliant’. It is important to note that once you are a ‘new business’ you should be able to gain access easily. However, if you have been in this category already in terms of operating a business and thus have outstanding taxes, you will ultimately need to get all outstanding returns and balances cleared. New Companies (Company Limiteds) are given a TCC upon successful completion of registration.
3. Cash Flow Projection Statements: A Cash Flow Projection simply shows the projected outlook of a business in terms of its inflows (sales or revenue) and outflows (purchases or expenses) over a twelve (12) to thirty-six (36) months period. The bank usually uses this to have an idea of the range or value of cash that will go in and out of your bank account. Also, pending on when the business was registered, some banks might need an Audited/Unaudited Financial Statement as an alternative to prove such inflows and outflows. All Of which we at BIZcare are more than happy to supply for you.
4. Other Personal Details and Documents: Of course, there are other documentations that will be required such as having a valid ID, TRN, references and proof of address (You can use a valid Jamaican ID, utility bill or bank or credit card statement). Also, if you are or were registered as a Partnership Entity, you will need to supply a partnership deed to show how profit will be shared amongst partners.
Perks or Benefits of having a Business Account
A business account provides a gold dust of opportunities. Now, let us imagine that you opened or registered a Company Limited and you are also the managing director of this company. Do you know and understand that you have opened up yourself to gain access to loans from both sides of employment? Well of course, let’s look within a little deeper to get a clearer view of what this means; more simply put, this means that you can have access to funds in the name of the company (being that a limited liability company is a man of his own) and also as an employee (Though you may own the company, you may also work for that said company). Now isn’t that wonderful? As you have opened the door to have access to business loans within the unsecured category at a far lower rate along with the opportunity of being able to take personal loans which may be unsecured as well. Which is why we always encourage individuals to open an LLC instead of taking the sole trader or partnership route. But that’s a next article or story in itself so let’s continue:
Better Handling of Cash or Transactions
Perhaps, this is one of the more important ones as most people or businesses are still not up to grabs with the importance of proper record keeping. As such, having access to a bank statement and cheque book can provide some leverage of sort within this field. Ultimately, we would want our entrepreneurs to understand this importance but due to the fast pace of the business world this is not so. Thus, what we accountants are forced to do is use their bank statements and cheque books to gain access to these important. Hence, what we encourage is that if you’re not RECORDING, please ensure that your monies are at least going in and out of a business account with the added proof of using a cheque book regularly, preferably on a daily basis, Please! As failure to do so might become detrimental in the case of audits done by the Tax Administration of Jamaica.
Gain Access to Overdrafts and Credit Cards
As a self-employed person, you’ll need to gain access to temporary credit. These most times come in the forms of having a credit card or gaining access to funds through an overdraft. When cash or monies are dried up or become limited, you’ll need access to a short-term facility, as you know cash will always come back in the short run. As such being a compliant individual or company, meaning that you lodge or deposit funds through your bank account frequently and meeting your loan payment deadlines marginally, these should enable you to have or gain access to these facilities overtime. Also, with the added notion if you are a business or company that buys supplies overseas or online these credit opportunities would prove to be essential. Hence, you can seek to contact your business banker and speak to them on how accessible you are to these.
Gaining access to a Point of Sale (POS) machine
With the added fact that most persons are not commuting with much cash anymore and also the safety attribute that’s attached to transactions of large volumes; It is clearly evident that leaving yourself or business open to accept payments of these nature is rather ill-advised. As such, having a business account will thus enable your business to garner access to a POS Machine that is more convenient in terms of deposits to your business account, which is usually updated to your account the day after. This of course is a major advantage to know how liquid your business is in terms of cash. Which will ultimately add to your ability to access business loans in the long run.
Without a doubt, online presence has predominantly became ‘that thing’ that businesses or companies must engage in intensely in order to gain customer accessibility from places that are usually outside the bounds or regions of normality. Having, a steady source to accept cash is now more than ever of high priority. Not to mention the aspect of remaining safe by not having to carry large sums of cash physically. As such, we will continue to encourage all persons of the self-employed category to open a business account as soon as possible. A notion also of which we at BIZcare will be more than happy to assist with.
If you need help or further information, please feel free to contact us at 1 (876) 902-7259 | 545-6928 or email us at BIZcareConsultationAcct@Gmail.com to arrange your consultation session. Do remember at BIZcare “Your Business is our Priority”. We offer the services of:
- Business Registration
- Tax Filing
- GCT Filing
- Payroll Services
- Consultation Services
- TCC Services
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Written by: Kmar Henry [ CEO |BIZcare Consultation & Accounting Firm Limited ]
Edited by: Sheryl Bailey [ Director | BIZcare Consultation & Accounting Firm Limited ]