Whenever a business idea is conceived, one of the main short-term goals is to gain more consumers. That is how a business grows- by garnering more consumers, stakeholders, customers, and employees. When a strong growth strategy is charted, finances are always considered. A business depends heavily on cash flow and working capital. No matter how much your company is valued at, if your working capital is not enabling you to make purchases and payments on time, your business is not doing as well as you thought it is; and sooner or later your business is likely to run out of cash.
To maintain a healthy cash flow that fuels your working capital steadily, business owners tend to diversify their expenses. This diversification is based on departments, types of purchases, types of expenses, and other factors as deemed fit by the management. Sometimes, to create different finance funnels for different kinds of expenses, companies tend to operate on multiple bank accounts. Some businesses are also spread across the country with multiple branches. Such businesses tend to have different bank accounts for each branch. While it may seem like a good idea initially, there are multiple issues associated with a business having multiple bank accounts. Let's understand in depth why having multiple bank accounts for your business does more harm than good.
The financial security of your business is compromised upon having multiple bank accounts because you have decentralized control over extra spending. If a business has a separate bank account for individual branches, chances are that the branch's finance team may end up overspending which will only be brought to light during regular audits. Such a decentralized nature of spending can be harmful to your business's financial health.
Without a centralized viewpoint of business finances, it is impossible to get full information about payables and receivables. This can further impact the decisions regarding upcoming business expenses that are to be made keeping in mind the available working capital. Low visibility in the financial chain is a deadly side effect of having multiple bank accounts.
Multiple bank accounts mean multiple approvals. It is a time-consuming process for everyone involved. If a business doesn't have decentralized spending liberty, it can act as a barrier to taking instant decisions regarding purchases.
Regular Bookkeeping is an essential part of maintaining a healthy financial strategy. When businesses have multiple bank accounts it can get cumbersome to reconcile AR and AP of all accounts and tally them to get the final amount. To do this for all bank accounts can take days and it is also subject to manual mistakes which can then lengthen the entire process of redoing the work.
To provide an easy solution for this, there are many FinTech platforms available in the market that offer a one-stop solution for all your business finance issues. These digital platforms are automated to track the AR and AP, simplify spend management, and incorporate digital upgrades to legacy methods of corporate expenses. EnKash is one such platform that provides a digital expense platform for all your business expenses. Not just that, EnKash has also essentially resolved the issue of multiple bank accounts by its powerful products- corporate cards.
With EnKash corporate cards, you can route all your expenses through these cards. Each branch can be given a separate card that gives them the liberty of spending without worrying about approvals. These cards are issued by the head financial team so that it is easy to maintain compliance and keep track of spending. These cards are linked to your Accounts ERP system so that you can track the expenses in real-time and monitor where your money goes.
You can also further decentralize the spending ability by providing each department with a card of its own. For example, the marketing division can have its expense card for marketing and advertising purchases whereas the purchasing team can be given their card for all business-related purchases. Sales employees who are generally on the field can be provided with such corporate expense cards so that you can save time by eliminating the entire time-consuming reimbursement process. Additionally, EnKash also offers Travel and entertainment cards, meal cards, fuel cards, Forex cards, Gift cards, payroll cards, E-commerce seller cards, and EMI cards. This huge variety of cards can enrich your corporate expense portfolio and turn your business into a smart business.
You can also further empower your employees by providing them with virtual cards. These cards are digital and can be used only for expenses done via a digital platform. These are one-off cards that can be used to pay for on-the-go one-time expenses. These cards can be customized according to maximum spend capacity, a number of swipes, authorized merchants, and many more nuances that can enable fraud protection and add a layer of security to your transactions. These cards are auto-destroyed after their use making them immune to hacker attacks. Commercial cards allow centralized control of expenses while providing decentralized spending liberty. In this way, your business does not need to have multiple bank accounts for various purposes. You can provide each team, department, and branch with their own set of cards so they can spend smartly.
EnKash has substantially unlocked new possibilities in the corporate expense ecosphere by introducing such smart and intuitive tools that empower you to make smarter business decisions.