How small businesses benefit from current account

Malaysia is truly the land of enterprise. Apart from large businesses and scores of companies in the MSME sector, there are thousands of start-ups mushrooming all over the land. But many of them do not follow the basics of commercial finance – and the first building block is completing the current account opening process.

In order to open a bank account in Malaysia, without holding a residency permit, you need reference from either a Malaysian contact or your company. It is usually required to hold a permanent work permit or to be in Malaysia under the MM2H programmed to be able to open a bank account. This definitely makes it more easier. Yet, as regulations are not that firmly set, some banks will also accept your application without such visa.

If your company does not have a business current account yet, here are 5 reasons why it should:

1 It separates business income from personal finances. One of the most underrated current account benefits is that it separates your business income from your personal savings. This is especially pertinent for sole proprietorship. You might have multiple savings accounts in the same bank, and you may be tempted to put your business earnings in the saving account. A current account accepts business payments directly, so there is no question of the money reaching your savings account.

2 It improves your credit rating. Having a business current account improves your credit score, especially if you maintain it properly. Exhibiting financial responsibility, in terms of maintaining account balances, never bouncing a cheque, not exceeding the OD facility, etc. helps improve your credit score. A good credit score helps the company secure finance for future operations or escalation – you can get loans more easily if your credit history is good.

3 It makes business banking really easy. Business banking becomes a breeze if you have a current account. The account is designed for business, and leading banks are offering several value-added services to make daily transactions easier. Besides, you can handle and monitor your finances more easily with a dedicated company account.

4 Your business can benefit from the bank’s products and services. Leading banks in Malaysia offer a bevy of products and services to help companies maximize their financial potential. These include zero balance current accounts, free transactions on money transfers, daily account summary, online current account opening with a full list of documents required for current account, several investment and loan options, forex and trade services, etc. Some banks also offer free inward transfers, online deposits, relationship managers, and many incentives for business current accounts.

5 Your business looks more professional with a current account. Another current account benefit is that it makes your company appear professional and like a serious business entity. It also tells prospective clients that you have a registered business with a GST number and professional tax registration.